Busy week for Australian dollar exchange rates! Will we rise above 1.70 on GBPAUD?

Tonight and later this week is some critical data for the Australian and global economy that may well shape exchange rates. Exchange rates move all the time for a variety of reasons but one of the main factors driving the Aussie are the outlooks from the Reserve Bank of Australia. The raising or lowering of the interest rate from the RBA has a massive impact on the movements on the Australian dollar as it alters investors perception over the currency. Tonight’s RBA news in the form of the Rate Statement and Interest Rate decision will be closely watched for its effect on the AUD and therefore GBPAUD rates.

Movements of a few cent in either direction cannot be ruled out as whilst the market believed the RBA would not have any change in policy the potential for the market to shift is always high on the Aussie. Owing to the higher interest rate in Australia of 1.5% versus other leading economies of less than 0% or very low interest rates, the AUD is used because of its higher ‘yield’. Like a higher interest rate on a bank account investors will use the Aussie to earn more on their money, therefore any shifts in the likelihood of that interest rate changing down the line will see the currency swing.

Key news later this week not just from Australia but also from the US could see changes in these global sentiments which make the AUD more or less attractive to hold. Clients looking to buy or sell the Aussie should be most aware of the potential for sudden switches in direction, if you are looking to make a transfer why not take a few minutes to contact me highlighting your position so that I can keep you updated on potential developments.

Despite the pound weaker many commentators are stating that perhaps the pound has been oversold. I really couldn’t rule out some small improvements but the likelihood of the pound struggling in the future remains high. If you have a transfer to make and wish for some assistance please speak to me Jonathan by emailing jmw@currencies.co.uk.

Thank you for reading and I look forward to hearing from you.

For more news on foreign exchange rates and to request a free no-obligation quote visit www.currencies.co.uk