Last week’s volatility saw the Aussie rise to hit highs of 1.729 against the Pound, the best levels seen since January before retreating by as much as 1.2% by the end of the week as a result of the ongoing Turkish crisis. The market report below looks into the upcoming events and economic data with the potential to impact Australian Dollar rates in the short term. The table below shows the range of exchange rates for the past 4 days and the potential returns you could have achieved when selling £200,000.00 during that time.
|Currency Pair||% Change||Difference on £200,000|
This volatility within Greece has left 'riskier' currencies like the AUD to fall out of favour with investors for the foreseeable future. With GBPAUD rates sitting at potentially pivotal levels there seems very little ahead to suggest the volatility will slow.
Last night’s positive Chinese foreign investment and inflation levels may well have given reason for the markets to back the Aussie to start the week. More liquidity within the Chinese market might suggest a healthy trading relationship with Australia over the months ahead, further justifying the RBA’s positive vibes around Australia’s growth prospects for the year to come.
That optimism could well filter through to tonight’s National Australia Bank’s Business confidence release which could offer further ground for those selling the Aussie to buy Sterling to maximise their returns. If you would like to plan around this event, feel free to get in touch and discuss the option of setting a limit order with your account manager, which will allow you to automatically book your desired rate, should the markets move in your favour outside of trading hours.
For all the positivity from the RBA last week, one remark will have sat very uncomfortably with the markets. Governor Lowe highlighted once again the worryingly stubborn levels of domestic Household debt, a concern that continues to justify the RBA’s decision to keep interest rates on hold and allow the differential with the US Fed’s monetary policy to spread further. My view is that this will remain an anchor for Aussie Dollar exchange rates until the markets see a change in trend that might force the RBA’s hand.
If Thursday’s key employment data follows suit from last week’s positive growth forecasts for example, the markets may take note and could lead to another burst from the Aussie with the 1.72 mark being tested once more.
Those with an AUD requirement may want to consider their options before this release just in case the markets move against them.
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