The Australian dollar has been weakening against the pound since the beginning of December, and the pound interbank rate reached it’s highest level against the Australian dollar yesterday since the Referendum vote in June 2016.
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This was following the news that a No Deal was almost certainly off the table after Parliament voted against a No Deal scenario, combined with the news yesterday evening of MP’s voting in favour of the motion to extend Article 50, giving the UK Government more time to come to an agreement on a deal.
To add to this, the recent bout of poor economic data this week has pushed the AUD interbank rate to weaken to 33 month lows. Business Confidence, Consumer Confidence and housing loans data releases all disappointed earlier this week, along with the slowdown on the Chinese economy having a direct impact on the Australian economy, due to its reliance on China for its exports. It was announced yesterday that growth in China’s industrial output fell to its lowest level in 17 years during the first 2 months of this year, and the number of unemployed citizens rose.
Asides from expected continued Brexit developments over the course of the next week as we approach the 29th March deadline, there are plenty of other factors expected to impact Australian dollar exchange rates. In the early hours of Tuesday morning, the Reserve Bank of Australia (RBA) will release minutes from their latest interest rate decision meeting on 5th March, where rates were kept on hold at 1.5%. The RBA have already suggested the possibility of future interest rate cuts, and if this is comes to fruition it could adversely affect the currency.
During the early hours of Thursday, a flurry of Australian data will be released including the RBA Bulletin, and unemployment figures for February. Both of these releases usually cause volatility for Australian dollar exchange rates, especially if these figures are released outside of the numbers expected, so do feel free to register your interest with us if you wish to plan around these events.
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