With the RBA Governor Philip Lowe suggesting that interest rates are unlikely to be increased until 2019 due to inflation remaining below target, AUD could suffer as its counterparts plan in interest rate hikes for this year. This report discusses how this and other factors, such as exports could affect the AUD in future. The table below shows the difference you could have achieved when buying £200,000.00 during the high and low points of the past 30 days.
|Currency Pair||% Change||Difference on £200,000|
It’s been a mixed week for the Australian Dollar. Early in the week the price of iron ore showed a slight rise which helped the Australian dollar gain value. Regular readers will be aware that there is a direct correlation between iron ore and the value of the Australian Dollar. Nevertheless, the gains were short lived as the Federal Reserve’s minutes released Wednesday evening gave off a hawkish tone and investors flocked to the US Dollar as it seems that an interest rate hike will occur as early as March.
Investors in recent years have been attracted to the Australian Dollar due to the higher yields offered (due to the higher interest rates) compared to other leading G10 nations. However, it appears that it is all set to change when the US raise interest rates in the upcoming months, which is the complete opposite stance to the Reserve Bank of Australia. The recent statement by Governor Philip Lowe suggests that the RBA are unlikely to raise interest rates until 2019 as inflation remains below target for at least the next couple of years. Couple this with forecasts suggesting it could be a bumpy ride for iron ore, I expect this to be a tough year for Australian dollar exchange rates and sellers should look to make arrangements.
With no data releases set today for Australia, all eyes turn to next week’s New Home Sales data released Tuesday morning. New Home Sales gives a good indication to the health of the housing market and potential spending patterns in the months to come. High readings tend to indicate that a high level of spending should occur down under and data releases such as Retail Sales should benefit.
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
From the moment I spoke with Dayle he was very friendly and explained how Foreign Currencies Direct operated. He also explained about the fluctuating Sterling/Euro market. Would definitely use the company again & recommend them to family & friends.
I’ve dealt with Dayle Littlejohn for over a year now and can honestly say I’m completely satisfied. He has always been totally efficient and has never failed to deliver consistently excellent service. I shall continue to use him and the company for currency conversion for this simple reason. Well done.
Brilliant company, well organised, helpful and Dayle who I deal with is extremely professional. I highly recommend this company who I have been dealing with for the past 2/3 years.