Australian inflation data is due overnight which could provide an indication of what the RBA could do at the next monetary policy meeting. This report looks at the factors with the potential to affect further monetary policy decisions. The table below shows the difference in AUD you could have achieved when buying £200,000.00 during the high and low points of the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBPAUD4.5%$16,140 AUD

Australian Inflation could see AUD Weakness 

As predicted in a number of my previous market reports I am confident that the Pound can continue to improve against the Australian Dollar during next month. We have continued to improve against the Australian Dollar and we are now at the best rate to buy Australian Dollars with Pounds since the Brexit vote back in June 2016.

Australian Inflation data is due to be released overnight and this is likely to provide us with some clues as to what the RBA will do at their next monetary policy meeting. The Australian economy appears to be split into two areas, east and west. The western economy is heavily reliant on the mining sector, which has started to notice signs of a slowdown whilst both Sydney and Melbourne appear to be performing relatively well.

The target rate of inflation for the RBA is for inflation to remain between 2%-3%. The expectation is for 1.9% tomorrow so anything lower could mean that the RBA will be keeping interest rates on hold for the foreseeable future. Indeed, the general expectation for the next interest rate hike in Australia is July 2019
Could Sterling continue to rise vs AUD?

When will the RBA change monetary policy?

With interest rates remaining on hold, the problem the Australia Dollar has is that is has often been used by global investors as a place to hold money for a strong yield. However, as the US has chosen to continue on its aggressive path of hiking rates this has caused the AUD to weaken. Meanwhile in the UK the Bank of England are meeting in the next two weeks and if we see rates go even higher this could see further gains for the Pound vs the Australian Dollar. Australia has also seen a disappointing jobs report last month with only 4,900 new jobs created compared to the expectation of 21,000 highlighting problems with the economy down under. Therefore, if you’re considering selling Australian Dollars it may be worth getting things organised in the short term as I think we could see the Pound making gains this week vs the AUD.

For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.