Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting Australian Dollar rates when buying £200,000 during the high and low points of the past month:
|Currency Pair||% Change||Difference on £200,000|
The Reserve bank of Australia kept interest rates at a record low of 1.5% last night, prompting a massive $50bn AUD sell off in the share market.
Many of the political leaders in Australia have called for calm as investors look to sell to avoid huge losses.
This morning’s interest rate meeting was the first of 2018 and policy makers decided to leave the cash rate in Australia unchanged now at a record low for nearly 18 months. The main concern as to why the Reserve Bank of Australia can’t raise interest rates at present is the concern for household debt levels and household income according to Governor of the RBA Phillip Lowe.
The Australian Dollar has already had a poor start to the week following weak retail sales figures and weak international trade data, later compounded by the latest interest rate decision. Personally, I can only see the AUD getting weaker this week so if you are selling AUD to buy currency it may time to start to get your plans in place sooner rather than later.
The Australian Dollar is going through a torrid time of late, having weakened against most of its major counterparts throughout January, and this morning’s interest rate decision and policy statement may be just the tip of the iceberg for the Aussie's weakness. Weak inflation, combined with poor wage growth and high levels of household debt means that strategists at the Reserve Bank of Australia don’t think that they’ll raise interest rates until 2019.
This could mean that the Aussie Dollar will continue to weaken throughout 2018. The global economy is currently performing well and interest rate appetite is gradually turning more positive. The US is looking to raise interest rates three times this year and if that is the case, the US and Australia will no longer be on the level terms, currently sat at 1.5% each. Much of the Aussie's weakness has been down to investors removing the risk by investing the US and receiving the same yield. I feel unless the Australian outlook for interest rates improves, the Australian Dollar will continue to slip.
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