Overnight the Reserve Bank of Australia decided to keep interest rates on hold for 24th consecutive month at record lows of 1.5%, which was no surprise. The Australian Dollar below discusses how this is likely to impact the Aussie Dollar in the medium term as well as upcoming economic data releases. The table below shows the difference in AUD you could have achieved when buying £200,000.00 duing the past 30 day, depending on when you timed your transfer during this period.
|Currency Pair||% Change||Difference on £200,000|
The Governor of the RBA Philip Lowe explained in his monetary policy statement shortly after the decision that the housing market in Sydney and Melbourne has continued to slow, housing credit growth has continued to decline due to the reduced demand by investors and inflation remains low and that is why interest rates remain on hold and will remain on hold for some time to come.
It’s a fairly busy week for Australian Dollar releases. This evening Westpac will release their latest Consumer Confidence numbers and Home loans will be released shortly after. Consumer confidence is important as it shows the level of confidence the general public have on their finances. With a steep rise last month which helped the Australian Dollar. If this trend continues a small boost for the Aussie should occur. However the likelihood is that the small boost would be short lived as Home Loans are expected to plummet to -0.2% from 1.1% showing a contraction in the housing market.
Later in the week the RBA will release their monetary policy statement. As interest rates remained on hold, I don’t see this being a positive event for the Australian Dollar. If you have Australian Dollars to sell short term it may be worth selling your position before Thursday night. However for clients selling Aussies to buy Pounds, the Brexit uncertainty I believe will continue to weigh on the Pound's value, therefore you may see rates go against you Friday morning but I expect those losses will be regained over the upcoming weeks.
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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