Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting Pound Sterling rates when buying £200,000 during the past week:
|Currency Pair||% Change||Difference on £200,000|
Recent research from Australian lender Westpac has suggested that they do not expect to see an interest rate hike in Australia until 2020.
This news is a far cry from the three rate hikes that had been predicted by ANZ bank by the end of 2019. What this does show is that there is a real disparity between analysts as to just where the Australian Dollar may head next.
The reason interest rate predictions are so important is that an interest rate hike (or the mere speculation of one) makes a currency more attractive and therefore leads to that currency gaining value. The opposite can be said should there be the hint of rates coming down.
It appears that growth figures for the Australian economy are expected to remain fairly buoyant, but wage growth is not rising at the pace that the RBA would like, much like many other economies around the world.
Inflation figures are still fairly stable and predicted to remain around the 2% figure during 2017 and 2018 so there is no need to rush into rate rises unless that figure changes.
We have a reasonably quiet week ahead for economic data in Australia and China this week, but do not let that fool you in to thinking that the Australian Dollar will remain quiet too.
With the recent comments from North Korea regarding Donald Trump and the U.S coupled with the fact that the Australian Dollar is perceived as a riskier currency, any further movements from either side will more than likely lead to Australian Dollar weakness, unless of course we see some positive news, in my opinion this is fairly unlikely in the current climate.
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