In the early hours of yesterday morning the RBA left interest rates unchanged at 1.5%. This is no surprise as newly appointed Governor Philip Lowe has hinted he is reluctant to cut interest rates unless he is has no other alternative. He is conscious that an interest rate cut will have on the Australia housing market. Down under property prices in the major cities are heavily inflated and further interest rate cuts could entice more people to purchase properties therefore prices would rise.
Overnight the latest building permits numbers were released which shows new construction projects. The figure disappointed and was released at -8.7%, 5.7% worse than the consensus. This data release shows that investment into Australia slowed in September. For Australian Dollar buyers this release has provided a window of opportunity as GBP/AUD exchange rates have risen 0.4% since the early hours.
Data releases that will impact the Australian Dollar for the remainder of the week are Trade Balance, Imports, Exports all released tomorrow morning at 00:30 and Retail sales numbers at 00:30 Friday morning.
With the Pound continuing to fall due to Brexit fears and the potential of an interest rate cut before the end of the year is likely, I am of the opinion the Pound will continue to devalue in the upcoming months. As I have stated above the RBA are reluctant to cut interest rates therefore investors will continue to invest in the Australian Dollar due to the high returns. Therefore I expect GBP/AUD to continue to fall and exchange rates could be in the lower 1.50s by Christmas.
Thank you for reading my Pound to Australian Dollar report, if you have an upcoming transfer youd like to discuss feel free to email me here.
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