Bank of England Quarterly Inflation Report and the effect on buying Australian Dollars

AUD GBP Looks to Data to Continue Recovery

AUD to GBP Australian Dollar Forecast Australian Dollar Weakness GBP to AUD

The Bank of England Quarterly Inflation Report has this morning helped to cancel out yesterday’s gains for the Pound vs Australian Dollar which hit 1.6145. The BoE governor Mervyn King has cut the growth forecast for this year to 0.8% from 1.2% claiming that the Eurozone crisis is the main problem for the UK’s stalling recovery. He also said that UK inflation will remain above 2% which is the government’s target. The EU forms 40% of our trading so to think we wouldn’t be affected by it is shortsighted so we could be in for a difficult period until the Greek crisis is resolved. However, the impact this may have on GBPAUD could swing either way as clearly the problems are affecting the UK but also the lack of confidence on the continent means investors may also shy away from putting money into Australian Dollars. Only time will tell…

In the last two years following the credit crisis aftermath investors have been seeking safe havens and a good place to invest. In recent times although not technically a safe haven investors have chosen the Australian Dollar as a good place for their money. With competitive interest rates and a growing economy Australia has proven to be an attractive yield. However, with the recent economic policy of cutting interest rates and the new mining tax coming into place shortly investors are looking elsewhere for their returns. With the New Zealand Dollar hitting 2.08 and the rate to buy Australian Dollars at approx 1.61 it appears as though the Antipodean currencies are still weakening and the next level of resistance could be at 1.63 for buying Australian Dollars. For further information about how to save money when buying foreign currency or repatriating funds to the UK please do not hesitate to contact me Tom Holian [email protected] or call me directly 0044-1494-787-478.