The Australian Dollar has been weakening for some time, with a number of factors ultimately creating a perfect storm for those looking to buy Aussie Dollars.

For the first half of the year, the Australian Dollar was one of the best performing currencies. Interest rate hikes domestically followed by a lack of faith in the Trump administration meant that investors were ready to view the Australian Dollar differently. Most of this strength appeared to be related to a lack of appetite for the US dollar due to its low interest rates. Now, as we prepare to enter 2018, the tables have turned and the United States are now preparing themselves for a third and final rate hike of 2017, removing the illustrious charm of the AU Dollar and hurting its value.

The release of Gross Domestic Product (GDP) figures this morning did little to help the Australian Dollar. Most analysts were expecting the Australian economy to have grown by 0.8% for the third quarter (up to September) however, the Australian economy only grew by 0.6%, a clear miss. Annual growth had only been recorded at 2.8% compared to the 3.0% expected. Earlier this week the Reserve Bank of Australia (RBA) decided to hold interest rates at 1.5%, citing a slower Australian economy which is likely to be offset by global headwinds from America and the UK, however they gave investors a slight glimmer of home by adding that the Australian economy may be ready to return to its high interest rate levels by March 2019.

The latest set of Gross Domestic Products would have done little to support this view, however a bullish Reserve Bank of Australia will now be keenly watching inflation figures and wage growth to see if they can raise interest rates before the March 2019 deadline set.