The Pound has picked up again against the Australian Dollar and broken through 1.69 the highest in quite some time. The are many reasons why this is the case but the main reason is surely to do with the potential interest rates cut down under on Tuesday. With the disparity between the mining industry and the rest of the economy an interest rate cut is likely to weaken the Australian Dollar in order to help with Australian exports and to help the wider economy get back on track.
There is also a possibility that Australia may look at further easing in order to weaken the AUD. With both the UK and the ECB due to meet later on today we could see some volatility and if the Bank of England decides against QE again we could see Sterling break through 1.70 shortly afterwards. However, a breach through this level is likely to be short lived so if you’re thinking about making a currency transfer to buy Australian Dollars then get in touch for a free quote Tom Holian [email protected]
The Fed meeting held last night in the US meant a small amount of US Dollar strength which is turn has weakened the Aussie against Sterling. Rates were kept on hold as expected but more importantly nothing was mentioned about their current QE plan stopping. However, recent positive data from the US has seen the American economy improve with the likelihood that QE will probably be cut/stopped later on this year. This could mean more confidence in the US economy and therefore a lack of confidence in more riskier currencies including the Australian Dollar. If this happens this could be another reason why we might see Australian Dollar weakness later on this year.
If you would like to save money compared to using your bank feel free to contact me directly Tom Holian [email protected]