Australian retailers have enjoyed the best sales figures in a year last quarter. This can be attributed to discounts driving goods off shelves, showing consumer spending is helping the Australian economy to maintain momentum. The Australian Dollar report below discusses the recent positive economic data to come out from Oz and the pending interest rate decision due this week on Tuesday. I have shown in the table below the difference in return you could have achieved in AUD when selling £200,000.00 during the high and low trading points during Friday of last week.
|Currency Pair||% Change||Difference on £200,000|
Recent figures from the Australian Bureau of Statistics (ABS) showed the June quarter jumped 1.2%, the best outcome in over a year, this was above estimates of a 0.8% gain.
This is very good news considering retail figures had been struggling with many consumers forced to spend their money on necessities rather than luxury goods due to the high cost of living and sluggish wage growth. These factors have in turn had a negative effect on inflation staving off any potential rate hike from the Reserve Bank of Australia (RBA).
The RBA Interest Rate decision is due on the early hours of Tuesday. Despite recent positive data I would be surprised to see a hike from the current 1.5%.
As we witnessed last week following the Bank of England (BOE) interest rate decision I think the speech following the decision will be the market mover.
RBA governor, Philip Lowe will talk in the early hours of Wednesday and will address monetary policy moving forward. If rates are kept on hold I think he may hint toward a rate hike sooner rather than later which could cause the Australian Dollar to gain strength.
Looking at GBP/AUD in detail I am convinced Sterling would have lost more ground against the Aussie if it was not down to the trade war between the US and China. With Australia heavily reliant on China purchasing it’s exports a Chinese growth slowdown will impact the Australian economy. This is causing investors to move away from the riskier commodity-based currencies to safe haven currencies, namely the US Dollar.
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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