The Australian Dollar has found support following better than expected unemployment numbers which arrived at 5.4% against expectation of 5.5%. It would appear the jobs market is improving which is seen as positive for the Aussie and could ultimately push up wage growth. The underlying concern for inflation which has been a major issue for the Reserve Bank of Australia (RBA) could also start to ease. Today's market report discusses the impact of positive econmic data on the Aussie Dollar; the table below shows the range of exchange rates during the high and low points yesterday.
|Currency Pair||% Change||Difference on £200,000|
Whilst the prospect remains of an escalating trade war stemming from the US and China, the Australian Dollar could be shielded in that trade ties between Australia and China are actually very strong. The risk for the Aussie on the back of a trade war appears to be less of a concern for the time being.
Consumer inflation expectations released yesterday have jumped materially higher which would suggest Australians expect prices to start rising down under. RBA Governor Philip Lowe spoke earlier in the week and cited underlying economic concerns and low wage growth as the biggest hurdles for the economy. The combination of these two latest releases should bode well for the dollar and could ultimately trigger the start of conversations as to when the RBA may eventually raise interest rates after almost two years at the record low of 1.5%.
The RBA publish its minutes next week from the last meeting and can always provide more clues as to the central banks thinking on monetary policy. Any indication that the RBA might be soon considering a move towards higher interest rates would be seen as positive for the Aussie.
Clients looking to either buy or sell Australian Dollars with Pounds should pay close attention to the Bank of England meeting next week as well as the ongoing Brexit developments. After a strong performance from the retail sector the Bank of England will have to consider the prospect of a rate increase in August. Similarly, the Brexit negotiations are at a critical stage ahead of the EU summit at the end of this month and are likely to have a direct influence on the GBP AUD pair.
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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As always a really quick and easy transaction. James is very knowledgeable and helpful. Great rates.
Always helpful and they always give rates at the very top of the range. Quick transfers to our french bank account – highly recommended. Well done James Lovick 😉