Will the Pound hit 1.80 this week against the Australian Dollar?

After having a very good run against the Pound the Australian Dollar has started to weaken in the direction of 1.80 on GBPAUD exchange rates. The confirmation from last night’s RBA minutes showed that interest rates are likely to be kept the same for the foreseeable future as they are helping to keep the economy performing well.

This has caused global investors to sell the Australian Dollar in favour of the US Dollar as the US Federal Reserve has already increased rates twice this year and this is the seventh time since December 2015.

Over the years the Australian Dollar has had a very strong positive yield but in recent times owing to the pace of rates going up in the US this has caused problems for the Australian Dollar.

However, not only is keeping interest rates on hold causing a problem for the Australian Dollar they are also facing the effects of Donald Trump’s latest threats of tariffs on Chinese goods.

As China is such a large trading partner with Australia then any negative news will often result in Australian Dollar weakness and this appears to be happening at the moment.

Trump has asked US officials to create a list of US$200bn worth of imports from China which could result in a very large trade war between the world’s two strongest economic powerhouses.

The Australian stock market has felt the effects of the news and the Pound vs the Australian Dollar hit the higher level of the 1.79 region earlier on during today’s trading session.

I personally think we could see the Australian Dollar weaken further this week and I would not be surprised to see the Pound hit 1.80 over the next few days.

On Thursday the Bank of England will hold their latest monetary policy meeting and recently the split has been 7-2 in favour of keeping rates on hold but with UK Retail Sales coming out much higher recently could this change one of the MPC member’s mind?

If you have a currency requirement coming up and would like to save money on exchange rates compared to using your own bank then contact me directly and I look forward to hearing from you.

Tom Holian teh@currencies.co.uk

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