The Australian Dollar has been benefitting from renewed confidence globally as the Trade Wars fail to have the overall negative effect many had previously expected. The Chinese economy has been slowing down recently which has prompted some fears the Aussie would struggle too. More on the muted impact on the Aussie Dollar below; the table shows the range of exchange rates throughout the past month and the difference in return you could have achieved when selling £200,000.00 during the high and low points.
|Currency Pair||% Change||Difference on £200,000|
However, the lack of any major deterioration in the Trade Wars has seen the Aussie stabilise. Events in Turkey last week also weakened the Australian Dollar as investors feared a major sell-off of all currencies connected to emerging markets.
Once again, the fears have failed to materialise and the Aussie has risen. The key news this week I feel is the RBA Minutes on Tuesday. Investors will be looking for clues as to the latest direction on interest rates.
There does appear to be a belief the only way is up now for interest rates, which could see the Australian Dollar rise further in the future. Later this evening Governor Philip Lowe of the RBA, Reserve Bank of Australia will give a speech which might set the pace for the Australian Dollar today.
Governor Lowe had recently commented on rising wage growth in Australia providing good times ahead for Australian citizens. Last week’s Unemployment news was positive so this will all potentially point to a more upbeat RBA and potentially a stronger AUD in the future.
The news of Turkish concerns gently fading has supported the Aussie which is now very close to the best rates we have had all year for selling AUD for GBP.
Clients looking to sell the Australian Dollar for the Pound could be provided with even better levels this week if the RBA news is positive. Sterling performance is moored to market sentiments over Brexit and these negative vibes seem unlikely to be shifting soon.
Thursday sees the UK Government release their no-deal Brexit plans but I am not holding out much hope. Almost every Government report on Brexit has quickly been shot down for lack of detail and it seems unlikely they will want to make a no-deal appear too disruptive.
With the Aussie finding some form following a positive domestic outlook and global fears failing to ignite the kind of weakness we would usually expect, the Australian dollar seems very well placed to test the 1.70 level or below in the weeks ahead.
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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