The GBP/AUD pairing has been volatile over the past month, as interbank rates ranged between 1.7570 - 1.8030, and in the anticipation of the latest interest rate decision from the Reserve Bank of Australia (RBA) last week, the Australian dollar saw gains against the pound.
It was announced that Australian inflation had risen by 0.1% for the previous quarter which slightly exceeded forecasts, with various economic sources linking the rise to a surge in oil prices earlier in the year, which is one of the countries key exports.
However, the Aussie’s gains didn’t last long, as it was announced later in the day that the US President intended to impose further trade tariffs on good’s imported from China, which most likely saw sentiment in the currency weaken as China is the countries key trade partner.
The Reserve bank of Australia (RBA) is set to announce their latest interest rate decision this week, with the result potentially influencing the Australian currency markets.
Despite current expectations of no change to the current level of 1.0%, analysts expect movement if the RBA still indicates a readiness to cut rates before the end of the year.
Over the weekend, it was reported by the Australian Financial Review Newspaper, that with current inflation levels still well below the 2-3% target, the RBA could look at an interest rate cut to further stimulate the economy, which would be in line with comments made earlier in the year by the central banks governor Philip Lowe.
For more information, you may wish to contact our trading floor directly on 01494 725 353 to speak with our team of experienced currency specialists.
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