What’s the AUD/USD Going to do in 2018?
Rowan Crosby • 1 min read
This time of year is always pretty entertaining, as the ‘experts’ come out with their predictions for the coming year. Regarding the Aussie currency, I’ve heard predictions that range from 90 cents to 50 cents.
So who’s right?
My opinion is that the AUD/USD must continue the current long-term downtrend. For one we’ve just heard this week that the US is set for a further three rate hikes in 2018. That is one big factor that will put pressure on the AUD and boost the USD. Australia should see rate hikes too but they will be outpaced by the USD. The Aussie economy isn’t in the best shape compared to the US.
Secondly, tax cuts in the US will see a surge of money return to the USD. Tax cuts will benefit the big companies, in particular, especially those that make up the Dow Jones. So I expect to see the Dow rally along with the USD.
So my prediction is that we will see the AUD/USD end 2018 in the 65-69 cent range. At the moment as we are pulling back after a nice down move, it might be a good time to think about selling the AUD/USD if you are looking for a long-term trade.