This Australian Dollar report will address the factors that could have an effect on exchange rates over the coming weeks. The table below looks at the difference between the rate you would have achieved when purchasing £200,000.00 at the low and high levels during the past month.
|Currency Pair||% Change||Difference on £200,000|
Interbank rates on GBPAUD have been trading between 1.5960 and 1.7950 since the EU Referendum which indicates current levels of 1.73 are well above the average. Movements on the Australian Dollar in 2018 will be largely determined by the prospect of any future interest rate hikes from the RBA (Reserve Bank of Australia).
As Sydney hit record temperatures of 47 degrees in the first week of January (something us freezing Brits can currently only daydream about) the property market too has been boiling over. Sydney represents 1/3 of the Australian property market so movements there have a big effect on the policy by the RBA. With prices very recently having reduced (falling 0.9% in December) there could now be less pressure on the RBA to raise rates this year and this might see the Aussie softer.
The first RBA meeting is in February and we could possibly see a further softening in tone. Having said that, weaker talk from the Australian central bank doesn’t always see a weaker currency as investors like the Australian Dollar because of its higher interest rate versus many other investments.
Early tomorrow morning we have a key release of Australian Unemployment as well as Chinese data which will include GDP (Gross Domestic Product), Retail Sales and Industrial Production. Whilst Australian data has been very strong lately any slight deviation could unsettle the Australian Dollar which has been on a gentle decline since last autumn when it became less likely the RBA would be raising rates anytime soon.
Chinese data has a huge influence on the price of the Aussie as it is their biggest export destination. Billions of Dollars’ worth of Australian commodities pass into China every year, any signs the Chinese economy is struggling would unsettle the Aussie, positive news would help it.
If you have any transfers involving GBPAUD there are plenty of key events in 2018 which will move the market coming from all corners of the globe. Please don’t hesitate to contact us to discuss your position moving forward.
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