The Australian Dollar has been weaker last week owing to concerns over global trade wars and their impact on China, Australia's biggest trading partner. Donald Trump has promised $267bn worth of tariffs are ready to go, which unsettled the currency towards the end of last week. More on the internal and global political factors currently impacting the Aussie below, with the table showing the range of exchange rates for the past month and the difference in AUD return depending on when you timed your transfer.
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The bad news is not just from overseas, this morning in the early hours RBA Assistant Governor Michael Bullock has suggested the amount of household debt in Australia could weaken their economy going forward.
Overnight we have also had Chinese Inflation data released, as Australia’s biggest trading partner this influences AUD rates. It showed Inflation rising which is actually some good news. Japan also posted a strong quarter of economic growth, Australia does business with both countries and the Australian Dollar is slightly stronger on the back of this.
There is important news on the Australian Dollar this week in the form of Unemployment data, released early Thursday morning. GBPAUD will be largely driven by Brexit sentiments and economic data in the UK. The most important of which will be Thursday’s Bank of England interest rate decision due at 12. We also have the Eurozone Interest Rate decision too which might trigger changes in sentiments that might influence AUD rates.
The longer term forecast on GBPAUD is still mixed with the uncertainty of Brexit. However, the economic fundamentals point to the UK raising interest rates further, possibly ahead of the RBA might see GBPAUD levels finding more comfort in the 1.80-1.90 range.
Thursday looks likely to be the most important day for GBPAUD, aside from any unexpected news which of course is always possible. With so many different factors to drive the pair, clients looking to buy or sell Australian Dollars may benefit from a chat with your account manager to discuss the latest news and strategy given the constantly changing nature of the FX markets.
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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