GBPAUD exchange rates have dropped to below 1.70 for the first time in a few weeks as Australia posts better than expected growth for the second quarter of 2013. Consumer spending has benefited Australian GDP which grew by 2.6% during the quarter compared to the same period 12 months before. The first quarter of this year saw growth of just 0.6% which came in line with a slowdown in China which tends to trade heavily with Australia by buying their natural resources. The original forecasts were for growth rates of 2.5% so this was a pleasant surprise for the economy.
This bout of good news is likely to give the Reserve Bank of Australia some breathing space before deciding when to change their current stance with interest rates. With the Australian central bank yesterday deciding to keep rates on hold this also gave the Australian Dollar some strength.
The recent weakening of the Aussie Dollar has been largely attributed to the slowdown in China and its decline in demand for iron ore which could mean economic growth going forward could be hit again. This could mean that this week’s good news for the Aussie Dollar could be very much short term.
With an election due on the 7th September the currency rate is likely to remain volatile over the next week so if you’re worried about the risk of the market movement going against you feel free to contact me directly for a free quote to buy or sell Australian Dollars Tom Holian [email protected]