The Australian Dollar has been performing relatively well for the most part of this week, after signals that the trade wars between the US and China have seemingly softened. The US have taken steps in reaching out to China to restart trade discussions, something which has been weighing heavily on the value of the Australian Dollar for the last couple of months. The AUD report below discusses the global and domestic economic factors impacting exchange rates currently with a look to the next key data to look out for. The table shows the range of GBPAUD exchange rates throughout the past month with the potential difference in return depending on when you carried out your transfer.

Currency Pair% ChangeDifference on £200,000
GBPAUD5.5%AUD $19,200

As China is Australia’s largest export partner, the risks of trade tariffs hurting the Chinese economy has had a knock on effect on the Australian Dollar causing is to weaken significantly. However over the course of this week, GBP/AUD rates have moved by 2.5 cents and meant that a $200,000 purchase became £1,800 cheaper if timed at the high compared to the low of the week.

Promising employment figures helps further AUD strength

Promising employment figures helps further AUD strength

In the early hours of yesterday morning, Employment Change figures were released and showed that 44,000 new jobs were created during August, which was far better than July’s reading and caused the AUD to strengthen against a basket of currencies. The reason why this is so significant is that unemployment levels and wage growth both have a key part to play in Inflation, and therefore interest rates. If unemployment is low and wages are high, this usually equates to higher inflation over time and could be a suggestion towards higher interest rates.

 

The Reserve Bank of Australia has kept Interest Rates at the current low of 1.5% and made it clear that they expect rates to remain low for the foreseeable future, so any reasons pointing towards the prospect of higher interest rates would be seen as positive.

The next data release of note which could impact Australian Dollar exchange rates will be the latest minutes from the RBA’s Interest Rate meeting two weeks ago, released on Tuesday morning. Any clients with an Australian Dollar requirement should also keep an eye out for further developments on the US China trade talks, as any positivity from these could cause the AUD to strengthen further. Get in touch with us today so that we can alert you of any spikes in your favour, as they happen.

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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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.