The Pound – Australian Dollar exchange rate has once again dipped below 1.50 and should it manage to stay below this level until the end of the week then we may see rates start to push back down to close to 30 year record lows (or highs if you have AUD to sell).

I would not expect rates to stay this low for too long however as the strong AUD will no doubt really start to hit the Australian economy and stimulus must be put into place to get things moving again. The strange thing is that some clients I speak to in Australia say that things are booming and others in different parts of Australia say things are nowhere near as good as are being made out and that if it wasn’t for the Chinese input then quite simply the Australian economy would not be too rosy.

High house prices are slowing the housing market and we still are yet to see the full effect of this, personally I feel there is still room for further interest rate cuts in Australia and in general when you see a cut in interest rates it is considered as negative for the currency concerned and a hike seen as positive as it makes that particular currency much more attractive to investors.