With the US Federal Reserve meeting due to take place this evening all eyes will be on whether they will or won’t taper their current Quantitative Easing plan which involves USD85bn per month. If tapering does take place we could see some quick US Dollar strength and a period of uncertainty for the Aussie Dollar.
There are two arguments both for Australian Dollar weakness and strength for the AUD. If the Fed do taper from their current USD85bn we could see Dollar strength which could mean investors moving away from riskier currencies including the AUD but on the other hand if we see the US economy improving it could risk appetite and therefore a demand for the Aussie. Until the announcement comes out tonight the currency markets will remain volatile in the run up to what will happen tonight.
The Bank of England minutes came out a few moments ago and showed a 9-0 vote against changing UK interest rates and also keeping QE on hold. This suggests that the MPC sees the UK economic recovery continuing. According to Mark Carney’s recent Forward Guidance interest rates in the UK will be kept on hold until unemployment falls to 7% or lower.
During most of 2013 the UK economy has gone from strength to strength with also Sterling improving against the Australian Dollar for the majority of this same period.
If you’re thinking about making a currency transfer and want to ensure you’re getting competitive exchange rates feel free to contact me directly Tom Holian [email protected]