The Australian dollar has reached a 4-month low over the past 24-hours, after the GBP/AUD exchange rate has hit 1.8732. It was back in October when the GBP to AUD rate was this high, and since then the rate has dropped as low as the 1.72’s which just goes to show the importance of timing transfers in the current climate.
|Currency Pair||% Change in 1 month||Difference on £200,000|
Sterling has been on an upward trajectory since the turn of the year vs the Australian dollar, with a boost of almost 2.5% this week alone.
Not only has the pound been boosted by the most recent Brexit news, which you can read about in the GBP section of this report. But the Australia dollar has also been coming under pressure for a number of reasons.
The Reserve Bank of Australia had previously outlined no changes to monetary policy until towards the end of this year, and those changes were expected to be hikes from the current record low interest rates. The RBA has now implied that the next move will be further cuts which has accelerated the drop in AUD value.
This week AUD rates have taken a blow as geopolitical concerns surrounding the tensions between India and Pakistan have soured investors’ appetite for risk. This topic has had the reverse effect on safe haven currencies such as the Swiss Franc and the Japanese Yen.
Also, the initial excitement surrounding the US-China talks now appears to have waned and this also is being reflected in the Australian dollar’s value.
In the early hours of next Tuesday the Reserve Bank of Australia will announce their Interest Rate Decision. No changes are expected from the 1.5% current rate but the statement afterwards could offer cues as to when the next move will take place, so it’s worth being aware of this. If you wish to plan around this release please do make us aware prior to next Tuesday.
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