This Australian Dollar report will address the factors that could have an effect on AUD exchange rates over the coming weeks. The table below looks at the difference in value between the low and the high when purchasing £200,000 during the past month.
|Currency Pair||% Change||Difference on £200,000|
Although the Reserve Bank of Australia (RBA) decided to keep Interest Rates on hold at the record low of 1.5% for the 16th consecutive meeting last week, a slightly more optimistic quarterly Monetary Policy Statement released on Friday helped the Australian Dollar to strengthen against the Pound. The main points to note from the report were that inflation and growth forecasts will remain unchanged from the RBA’s previous statement three months ago, unemployment level projections are set to fall from 5.5% to 5.25%, and the growth outlook for Australia’s major trading partners is looking ‘a little stronger’. China’s growth is expected to improve, which impacts the Australian economy as China is their largest trading partner.
The RBA is confident that the Australian economy is on the right track, however interest rate setters will be holding out for the foreseeable future before hiking rates, until employment levels improve further and inflation returns to the central point of the RBA’s target.
Clients with a GBP/AUD or AUD/GBP requirement would be wise to keep an eye on the series of speeches due to commence on Wednesday, starting with Foreign Minister Boris Johnson. Brexit Minister David Davis, Trade Minister Liam Fox, and Prime Minister Theresa May are all due to speak over the coming week, and if these are well received by the markets, we could see Sterling climb back towards 1.80 against the Aussie.
Consumer Confidence and Unemployment rates will be released overnight on Wednesday, and as Unemployment levels are something which the RBA are keeping close tabs on, any deviation from the expected 5.3% could result in AUD swings. Governor Philip Lowe will also be speaking overnight on Thursday and will be keenly watched by investors. As these releases are outside of trading hours, get in touch with your Account Manager to find out how a Limit Order contract can work for you.
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