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||% Change||Difference on £200,000|
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.
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
I switched to Foreign Currency Direct earlier this year, and I can honestly say they have been absolutely marvellous. Registering your client could not be easier, the Portal allows you instantly access your clients giving us full transparency, and my dedicated Account Manager Amelia does a fantastic job of keeping me informed.
Rob Harold is a pleasure to work with, he has an outstanding conversion rate from leads I put forward and provides those clients with an excellent service. By always keeping me informed at every stage, this helps me keep my sales on track at the vital time when payments are due.
I use Foreign Currency Direct for my own currency transfers and I recommend their services to our clients for currency exchange on Spanish property for purchases and sales through Costa Blanca Casas.
Always the best rate for me and my clients. As we have many clients at Girasol Homes we get 5 star service for them, and we expect it as well, always a personal and bright service. Highly recommended.