Aussie slightly lower on RBA comments, where next for GBPAUD exchange rates?

The Australian dollar is a little lower this morning as the Reserve Bank of Australia Governor Philip Lowe reiterated that Unemployment was a key factor in any decision to raise interest rates and that for now rates would ‘remain steady’ at 1.5%. The raising and lowering of interest rates is a huge factor driving exchange rates and these comments alongside global events have seen the Aussie a little softer. If you are buying or selling Australian dollars then making some plans around future trends is key to securing the best rates.

Global events are always something to bear in mind with the Australian dollar but more so at present. With the Australian dollar benefiting and suffering as global sentiments on markets rise and fall the latest developments with North Korea and the US dollar are key. Essentially the US dollar is rising because investors are concerned about the prospect of a nuclear war. As the Australian dollar is used by investors because of its high yield (higher interest rates) in times of uncertainty likes this investors will pull their funds and look to invest in ‘safer’ shores, eg the US dollar.

At present this is not overly pronounced, we are only talking a couple of cents off the more recent levels. However any deterioration in the North Korean situation could easily the AUD lose value sharply. There is some important US economic data due at 13.30 UK time today which might lead to some swings on USD/AUD which would in turn influence GBPAUD exchange rates.

All in all I expect the pound to continue to struggle but in the absence of any new fresh bad news and a slightly more dovish RBA, we could see GBPAUD gently drift higher. Next week’s UK Inflation data, Retail Sales, Unemployment and then Australia’s Unemployment data could all be market movers. If you have a transfer now or in 6 months, making some plans around up coming events is key to getting the most for your money.

Whether on amounts of 10,000 GBP or multi-millions, if you have a transfer we can secure preferential commercial rates of exchange and offer practical assistance with the timing of when to lock in a rate.

Thank you for reading and for more information please contact me Jonathan Watson by emailing jmw@currencies.co.uk.

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