Sterling has continued to fall today against the Australian Dollar following the statement released by the RBA last night. The difference from high to low has been 2% of the difference of £1,100 on a currency transfer of AUD 100,000. The statement basically stated that the RBA’s interest rate cutting cycle has now come to an end which has provided some respite to the months of weakening for the Aussie Dollar.
However, my personal feeling is that this is likely to be relatively short term as the other factors are still there. The Chinese economy has slowed down as of late, Australian unemployment is close to the highest level since the financial crisis and the mining industry is also struggling.
With inflation running relatively high down under this could be another reason why the rate cuts are now off the agenda. Typically, high inflation can lead to an increase in interest rates but this would be catastrophic for the Australian economy so the only choice was to remove them from the agenda…for the time being!
Even though the UK construction sector has shown its biggest rise since 2007 this has meant that Sterling has remained strong across the board bar the Australian Dollar exchange rate so it goes to show how important this data release was last night.
Australian Retail Sales are due on Thursday which I think could be weak so this could lead to Sterling improving against the Australian Dollar during the latter part of the week.
If you have a currency transfer to make and want to save money compared to using a bank then contact me directly Tom Holian email@example.com