This Australian Dollar report looks at the latest minutes from the RBA's latest interest rate decision, and how potential interest rate hikes could affect the Aussie against other currencies also due further interest rate hikes in the coming months. The table below shows the difference in AUD you could have achieved when buying £200,000.00 during the high and low points of the past month.

Currency Pair% ChangeDifference on £200,000
GBPAUD3.52%AUD $12560

The Reserve Bank of Australia’s minutes from their latest interest rate decision earlier this month were released in the early hours this morning. As expected the RBA were fairly positive focusing particularly on wage growth improvements as the main indicators to any rate hikes this year. Their opinion of the domestic outlook was optimistic sighting global growth as the main reason for unemployment falling and productivity is expected to improve this year.

Furthermore, the RBA have been pleased to see the Australian Dollar lose value over the last 6 months. External factors with the Aussie being one of the only nations offering returns on savings in the past few years has seen the currency massively increase. However as there has been a return to volatility in stock markets and interest rates across the world investors have moved their funds out of currencies like the Aussie.

Could Sterling continue to rise vs AUD?

 Will the RBA have to raise rates?

There is now a danger in Australia that things could start to go the other direction with the Aussie giving up ground. If the US, Canada and even the UK start to raise interest rates there could once again be money flooding out some of the more commodity based currencies.

Australia’s main export, Iron Ore has been defying the markets as prices rise, whilst oil and gold have been falling from recent peaks. However, there are reports from China that the government is trying to reduce steel output in order to clean-up air pollution, this in turn will reduce the value of iron ore.

Should that be the case, the Australian economy would directly suffer, with wage growth stagnating for a longer period than desired by the central bank. The RBA could be forced to wait and by that time they’re further away from central banks interest levels across the globe. In short if the RBA are reluctant to raise rates the Australian Dollar could be back up towards 2 against Sterling.

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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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.