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 Aussie Dollar rates when buying £200,000.00 at the high and low rates.
|Currency Pair||% Change||Difference on £200,000|
The Reserve Bank Australia Minutes released last night suggested they’re pleased with the countries job market however there is concerns over wage growth and household debt.
These minutes reiterate the points presented by RBA board member Ian Harper last week who suggested the Australian economy was not performing to a level to justify an interest rate hike. Harper suggested that whilst unemployment is coming down there had been a slowdown in wage growth and household incomes, making the tightening of monetary policy an illogical decision.
The RBA only a few months ago suggested they want to see the Australian interest rate move back to nearer 3.5% in the next few years, but it’s clear now that this may be a long way off. The other main concern for the RBA is the lack of control they have on the currency. The recent depreciation of the Aussie in the last week may come as a relief to policy makers after the AUD has gained 30% since the Brexit vote last year against Sterling.
This week will be important for the Aussie with the latest US Federal Reserve interest rate decision expected tomorrow. The reason for this is the level of risk investors choose to take to make returns. Over the past year the Aussie has had one of the highest interest rates for a developed market offering good gains for investors, however the US Dollar which is considered a less risky currency could soon match the same interest rate.
If there is a hint towards a further US rate hike in 2017 then I would not be surprised to see Sterling make further gains against the AUD, even taking the level towards 1.75 before the end of September.
If you’re looking to sell Australian Dollars it might be worth acting sooner rather than later. The Aussie has been considered to be a majorly overvalued currency in the past few quarters and the strength may be about to unravel. Contact your broker to find out your best option to protect your future currency requirement.
For more information on how future data releases could affect your Aussie Dollar requirement, call our trading floor on 01494 725 353 or email me here.