China used to be useful answer to explain in one word why the Australian Dollar was so cheap only a year ago. Yet whilst their economy has slowed it is now holding firm.
Growth is still staggeringly far ahead of other global economies, with projections for the year remaining at 6.7% in China, whilst the US (the only economy larger than China) is still moored around 2%.
Most of our longstanding customers will be well aware that the positive or negative climate in China has a dramatic effect on the value of the Australian Dollar due to the interconnected nature of the two economies. This news was enough to halt the rally Sterling established on GBP/AUD overnight, and see a central level below 1.60 once more.
The Reserve Bank of Australia’s latest meeting at the beginning of this month is finally open for all to see with the minutes from the meeting itself.
The new Governor Philip Lowe has already made a splash with comments from his first meeting showing markets a stark contrast to his predecessor. He all but took further interest rate cuts off the table, and took a very positive tone for the Australian economy. The minutes now explain why, and are suggestive of longer-term Australian Dollar strength to come.
Firstly, there is a clear focus on the housing market, and concerns over house price growth. The high clearance rate at auction houses in Sydney and Melbourne suggest that further interest rate cuts for the Australian economy are unlikely as this would likely spur on a housing bubble. Good news for AUD holders.
Secondly the brief mention of the recovery in commodity prices recently is further suggestive of a lack of need to intervene in the economy. The Governor has been given some breathing room to get the lay of the land in his new role before making any firm decisions one way or another.
If you have an upcoming AUD buying requirement, making the most of spikes is crucial as further Sterling losses could unfold. Call our trading floor on 01494 725 353.
Would not hesitate to use again, Joshua from FCD looked after us very well and we were able to get a good rate of exchange, the whole process was very quick and painless.
This was a faultless service from start to finish. Our contact, Joshua, could not have been more professional and efficient. He guided us excellently through all the stages of transferring money to the UK. Joshua even managed to get us the best exchange rate available at the time, and he did this with a pleasant manner and exceptional politeness.