The Reserve Bank of Australia (RBA) have chosen to cut interest rates to a record low of 1.25%, as it looks to turn around sluggish employment, wages and inflation. Financial markets have fully priced-in two RBA interest rate cuts for 2019 and are now considering the idea of a third if global trade tensions continue.

Currency Pair% Change (Month)Difference on £200,000
GBPAUD3.1%AUD $10,140
RBA finally cut interest Rates

RBA governor Philip Lowe said last month the bank would "consider" the case for a rate cut this Tuesday, after first-quarter inflation data surprised on the downside and as other developments in the economy forced the RBA to cut its Aussie growth forecasts. Thus leading to the cut we saw today. RBA’s Governor Phillip Lowe is scheduled to make a statement following the decision last night.

However, it's the market response to the RBA today that's expected to power the Aussie higher during the days ahead, which could be more bad news for the Pound to Australian dollar rate. As the GBP/AUD interbank rate has currently dropped to levels under the new 1.82 resistance mark. The accompanying statement today could cause further market movement. For GBP/AUD the driving factors for the pair include Brexit and the future of the RBA forecast for the rest of the year to attempt to prompt growth for the economy.

AUD economic data this week

Data is being a little overshadowed by the RBA decision, however they still give an insight into the future of the economy. GDP data on Wednesday morning for QoQ is expected to see a small increase from 0.2% to 0.3 % and YoY are predicted to increase from 2.3% to 2.5%.

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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.