Sterling has strengthened against all major currencies as the UK services sector announced that it grew by its fastest pace in over 16 years. The PMI data showed a reading of 62.5 in October compared to 60.3 in September. If the figure is above 50 this signifies growth and confidence. With the RBA deciding this week to keep interest rates on hold at 2.5% the Aussie did gain some strength as some analysts thought there was an outside chance of a rate cut.
Employers in the UK are also hiring at their fastest pace since 1997 and with the Bank of England unlikely to amend interest rates until UK unemployment hits 7% predicted to be at that level in 2016 this news means that this could happen sooner. If the UK does decide to raise interest rates this would inevitably boost Sterling giving rise to some better buying opportunities but for me this is a long time away.
The National Institute for Economic and Social Research has this afternoon claimed that UK interest rates could be increased as early as 2015 which has also given rise to Sterling strength this afternoon. UK unemployment is at 7.7% and Mark Carney has said interest rates will not change until unemployment hits 7%.
If you’re considering buying or selling Australian Dollars and want to make sure you’re getting bank beating exchange rates feel free to email me for a free quote Tom Holian [email protected]