The Australian dollar has surged in recent weeks, with some experts predicting the currency will hit a new record this week, as a global trade deal is signed.
Read moreThe Federal Government has already announced that it will lift its forecast for growth in the quarter to March.
It is also planning to reduce its forecast in the next quarter, which is due to take place in April.
But with the world’s second-biggest economy currently experiencing a major slump in the global economy, analysts are predicting the Federal Government will be forced to cut its forecast, potentially leaving it with a $4.4 billion hole to fill.
In recent weeks the Australian dollar is being driven up by a surge in trading volumes, which has seen the Australian Dollar gain more than 4 per cent.
But the increase in trading has caused concern for traders, with the Australian Pound plunging to a two-year low against the US Dollar.
In an effort to make matters worse, a trade deal between the United States and China is expected to be signed this week.
That deal, known as the Trans-Pacific Partnership (TPP), is the largest trade deal in the world and has already seen major changes to global trade.
The Australian dollar began the year in the red, as traders were concerned about the prospects of a trade war with the United Kingdom, but is now trading well above its long-term average, with a gain of almost 5 per cent in the last two weeks.
It has also risen against the Australian Ruble and the Japanese Yen.
On Monday, the US Federal Reserve raised its key interest rate target to a range of 0.25 to 0.50 per cent from its original target of 0 per cent, meaning it is now willing to use a range to signal its intention to start raising interest rates.
The Federal Reserve is the central bank of the US.