With the news that both the Bank of England and the ECB keeping interest rates unchanged and with Mario Draghi’s recent comments about supporting the single currency we have seen investors flocking back into the Australian Dollar. This has seen the GBPAUD exchange rate drop to as low as 1.4770 on interbank but as previously commented on last week’s post we are seeing the support level currently in place at 1.4750 not yet being broken. The Bank of England declined to extend its current amount of QE which stands at £375bn and the ECB kept interest rates on hold at 0.7% the record low for the Euro zone.
Owing to the recent QE it was no surprise that no more was extended as it will always take a bit of time to see if the scheme was been successful or not. With the UK’s GDP at -0.7% last Wednesday the previous month’s QE will have had little or no impact on the data. I am expecting to see the GBPAUD rate improve marginally tomorrow as the currency markets seem to have overreacted to the interest rate decisions this afternoon in the UK and Europe. Sterling has strengthened against the Euro to the higher 1.27 region and expectations are for it to break through 1.28 later on today. If you need to make a currency transfer and are worried about not getting the best exchange rate please contact me Tom Holian [email protected]quoting ‘Australian Dollar Forecast’ for preferential exchange rates. The company I work for is a dedicated foreign exchange specialist and typically we can save you up to 4% on any currency transaction compared to using a high street bank.