The GBP/AUD rate dropped on Friday due to poor UK GDP data, this followed what had been a strong week and the steady gains made since last August. However, the currency has remained above what could be a support point of 1.80 and economists are still optimistic of reaching an exchange rate of 2.00 at some point this year.

The table below shows the difference you would have received when buying £200,000 at the high compared to the low over the last week.

Currency Pair% ChangeDifference on £200,000
GBPAUD1.60%$5824
RBA Interest Rate Decision

The coming week will be an important one if the confidence in the AUD is to grow, as the RBA holds its monthly interest rate meeting on Tuesday and presents its quarterly economic outlook on Friday. The interest rate decision however, is unlikely to bring any surprises and is expected to be kept on hold at 1.5%, but analysts who were expecting no change until early 2019 are now expecting this to extend until 2020, adding further pressure on the Aussie and creating a less than confident market outlook.

Although Philip Lowe, the governor of the RBA isn’t expected to announce major changes to monetary policy, markets could still see benefits if the speech is delivered with a positive outlook rather than a dovish approach, which was seen last week from the ECB president Mario Draghi which initially reduced confidence in the Euro.

Whilst other major currencies such as GBP and USD have improved their economic outlook over the past 12 months, the AUD has not with poor domestic data, reduced commodity prices and a slowdown with Chinese trade being key influences.

Trade with China is a key driver of the Aussie’s strength as China’s domestic investments are largely focused on developing physical infrastructure, hence the demand for Australia’s commodity exports such as iron ore and coal, hinges on such programmes.

As a commodity-based economy this does not breed confidence in the short-term future for the AUD, as there is clear dependency on economic development in ‘buyer’ countries for their exports. This may see buyers waiting for more positive signals from Australian domestic data later in the year before investing.  

For more information on how future data releases could affect your currency transfer, call our trading floor on 01494 725 353.

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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.