The AUD saw slight gains during yesterday’s trading, despite a warning from Reserve Bank of Australia (RBA) governor Philip Low, during his speech early this morning.
In it he addressed some of the central banks underlying economic concerns, which included low wage growth. This he fears, could hamper inflation levels reaching the government’s target of 2.5%.
The reason wages were not growing in line with other developed countries is still unclear, but his comments may well handicap any major advancement for the AUD as we head towards the end of the trading week.
The AUD has made little inroads against the Pound over recent days with GBP/AUD rates trading between 1.7560–1.7679 during Wednesday’s trading. The table below shows the difference in AUD exchange rates for the last month, and the difference in Aussie Dollars you could have achieved over this period.
|Currency Pair||% Change||Difference on £200,000|
This may surprise many, due to Sterling’s struggles elsewhere but the AUD is not the only commodity-based currency to come under some pressure recently.
A slowdown in global growth has had a negative impact on all of the commodity-based currencies and the AUD is always likely to suffer in times of a global slowdown, due its economic reliance on its export industry. Whilst RBA governor Low’s speech may dampen market expectation, we need to remember that the overall trend for the AUD against GBP has been positive since the turn of the year. The AUD continues to find plenty of support under 1.80, which should now provide it with a lot of protection, even if the Pound were to gain some momentum.
We could also look at the Trump/Kim summit as being beneficial, even though the actual outcome of the meetings and its ultimate benefits are far from clear. In the short-term investors may look at in a positive light when it comes to global relations, which in turn can help support the AUD around its current levels against the Pound.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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