The latest Reserve Bank of Australia (RBA) meeting minutes were released in the early hours of the morning and cited reasons as to why policy makers decided to keep interest rates on hold at record lows of 1.5%, at the last RBA policy meeting.
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Although policy makers kept interest rates on hold, the outlook for the Australian Economy and therefore the Australian Dollar was positive. Domestically, unemployment has been declining down under since August, and policy makers expect economic growth to be helped by a combination of low interest rates and a strong economy.
Currently, the main downside for the Australian Dollar is the wider felt effects from the US-China trade war which as mentioned in my USD section, has taken a fresh turn for the worse over the weekend, and causes investors to move away from riskier currencies such as the Australian Dollar.
From the report this morning, it seems as though the Australian economy is performing well which creates room for the RBA to think about raising interest rates down under at some point next year. A slowdown in the US Fed rate should also help the AUD to regain some traction against other currencies as the attraction to such high interest rates compared to Australia fades, investors will likely move back into the AUD in the coming months helping it strengthen.
Although this is an optimistic prediction for the future, the short term reality is that we have Brexit to deal with in the UK and whilst the risk sentiment in global markets remains, due to the US-China trade war, both are set to remain under pressure short term.
However, if either situation becomes extremely volatile then we could see excellent opportunities for both buyers and sellers in the coming days or weeks.
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