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This year the Reserve Bank of Australia (RBA) has continued to cut interest rates leaving the base rate of interest down under at a record low of 1%.

The tightening of monetary policy has so far failed to stimulate the Australian economy which has contributed to the RBA board discussing alternative methods of stimulus to try and help the ailing economy.

There are now plans to potentially implement quantitative easing which is what the ECB (European Central Bank) has been doing for some time now to boost the Eurozone economy. The minutes of the RBA’s July meeting revealed that these ‘unconventional monetary policy measures’ were discussed so the RBA is prepared to use them if required.

Historically the RBA has only amended interest rates to slowdown or stimulate the Australian economy. The RBA could potentially plan to; purchase government securities, provide longer funding to banks and to intervene in foreign exchange markets to reduce the chances of a recession.

Trade wars a potential negative trigger but US Consumer Confidence remains high

GBP/AUD remains below 1.80, for now at least

Both the pound and the Australian dollar are under pressure at the moment, although for different reasons as the Australian dollars troubles are mostly due to economic uncertainty as opposed to the UK’s ongoing political issues.

Over the past year the GBP/AUD rate is almost flat although in recent months the Aussie dollar has mostly benefited from sterling weakness which has kept GBP/AUD below 1.80 for almost 2-months now.

Should a last-minute deal between the UK and the EU be struck and the US-China trade wars continue, we could see the 1.80 level tested again. Do feel free to get in touch if you wish to be updated regarding any market movements between the pair.

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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.