This Australian Dollar report will address the factors that could have an effect on AUD exchange rates over the coming weeks. The table below looks at the difference between the rate you would have achieved when purchasing £200,000.00 at the low and high levels during the past month.

Currency Pair% ChangeDifference on £200,000
GBPAUD4.18%AUD $14,440
Reserve Bank of Australia may have to raise interest rates

Commodities still the main driver for 2018

The Australian Dollar has remained strong in the past two weeks leading up to Christmas and even defying analysts' predictions that the Aussie would drop in value in the face of the pro-business tax reforms passed in the US which would lead to further interest rate hikes throughout 2018 for the US.

The three proposed interest rate hikes would leave interest rates higher in the US than that of Australia for the first time in almost 2 decades. This was largely expected to be Australian Dollar negative however it didn’t have the favoured effect.

Looking retrospectively, the main driver for the Australian Dollar has been commodity prices. In the past two months, the price of copper and iron ore, two of Australia's main exports have rallied with further gains expected.

With the global economic recovery well underway, if economies such as China's really start to pick up again, I would expect the Australian Dollar to pick up some momentum too.

Will the Reserve Bank of Australia raise interest rates in 2018?

Economic data is light over the festive period, so looking at last week's important Reserve Bank of Australia's policy meeting minutes which outlined further scope for interest rates to be raised in 2018 down under. Analysts will be focused on key data releases early next year to see if raising rates is plausible, and will want to see a pick up in consumer confidence and spending firstly before altering interest rates. Early next week the business confidence report for manufactures will be released in Australia, and could set the tone for the economy in early 2018. Acting ahead of data releases such as these may be a clever idea whilst liquidity in the markets is low.

For more information on how future data releases could affect your Australian Dollar requirement, call our trading floor on 01494 725 353 or email me here.


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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.