Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements during trading hours yesterday when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
Australian unemployment released overnight arrived better than expected at 5.5% helping to strengthen the Australian dollar.
Chinese data has also impressed the markets overnight with stronger retail sales numbers and industrial production data which also bodes well for the Aussie. Chinese GDP also held firm at 6.8% - When China performs well it generally means the outlook for the dollar is brighter considering Australia’s large export market to China.
Business confidence down under meanwhile remains upbeat as per the National Australia Bank which suggests the economy is improving.
The Australian dollar could start coming under pressure after the Reserve Bank of Australia (RBA) released a very dovish set of minutes earlier in the week which suggest the RBA are in no hurry to raise interest rates.
The statement highlighted that a number of major central banks had either started to reduce the degree of monetary stimulus or were considering doing so but this does not mean that the RBA will be following suit at this time. Members of the RBA also pointed out that monetary stimulus measures such as Quantitative Easing had been used significantly more than in Australia since the onset of the financial crisis. The tone would suggest that an interest rate increase is still a long way off with no change expected until late 2018 and beyond.
In a similar situation to what Britain is facing, Australians are also feeling the squeeze of weak wage growth and higher consumer debt levels which is making the central bank reluctant to take action.
The stronger Australian dollar and these other factors all make good reasons for the RBA to not hike anytime soon and should help see the Aussie weaken. A move back over 1.70 for GBP AUD seems likely in the coming weeks.
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