The Australian dollar had a tough week losing ground as the US dollar rose and concerns over global trade punished the commodity currency. As is so often the case with the Australian dollar it was events globally which drove the currency’s performance and this week ahead seems likely to be similar.

The development of the Meng Wanzhou case, the Huawei official arrested in Canada has the potential to impact the commodity based currency.

The Trade Wars are of a major concern for the Australian Government and the Australian dollar which relies heavily on trade with China. The concerns over the damage the fallout between the US and China is having on Australia saw the Australian dollar struggle last week.

Domestic news this week will see the latest House Price Index information which could be highlighting a fall in house prices. Australian consumers are heavily indebted and this will heap further pressure on the RBA to avoid hiking interest rates in the future, to add further pressure on the currency.

AUDGBP interbank rate at best levels in 2 months

Will the RBA raise or lower rates in 2019?

Thursday sees the latest RBA Bulletin and I think a major question to ask now is 'will the RBA raise interest rates in 2019?' All of the signs are pointing to further troubles ahead for the Australian economy as the Trade Wars, a strong US dollar and concerns at home limit the scope for any rate hikes.

The next move for the RBA could well be lower if global trade concerns increase in 2019, the economy might well need a shot in the arm and a decrease in interest rates would see the Australian dollar much weaker, by making it less attractive to hold.

GBPAUD Forecast – Which will be weaker?

The pound to Australian dollar exchange rate could be in for a very volatile period as the market continues to adjust to the two of the biggest factors driving financial markets, Brexit and the Trade Wars. The pound is in for a busy few sessions as the market tries to weigh up the possible outcomes from the Brexit and the Parliamentary vote.

Last week saw movement of over 5 cents on the pair as the market struggled to price in these two major factors. I expect this to continue with added gusto this week and clients looking to trade the pair should be in close contact with the team to ensure they are up to date with the latest news.

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Currency Pair% Change in 1 monthDifference on £200,000
GBPAUD4.81%AUD $16,421
Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.