The Australian dollar has continued to rise in today’s trading session after positive comments yesterday by RBA governor Philip Lowe Lowe and a shock result in the US midterm elections which some say may put pressure on the US dollar.
Australia has been one of the few countries unable to raise interest rates but Mr Lowe noted that he expects this to change over time as the job market strengthens and pushes inflation higher within the RBA’s target range of between 2 and 3 percent.
"The outlook for the labour market remains positive. With the economy growing above trend, a further reduction in the unemployment rate is expected to around 4¾ per cent in 2020. The vacancy rate is high and there are reports of skills shortages in some areas. Wages growth remains low, although it has picked up a little," Mr Lowe said.
In a stunning upset overnight, the democratic party in the US have regained control of the senate which means they can now put a stop to the unchecked powers wielded by US president Donald Trump which may be bad news for the US dollar.
Many of Trump’s policies such as sweeping tax cuts have have been a major boost for the US dollar but with his parties defeat in the elections, the chances od Trump pushing his political agenda through has been greatly diminished.
This may give the chance for currencies such as the Aussie dollar to regain some ground against their US counterpart something they haven’t been able to do for the best part of Trump’s presidency.