If you’ve been reading my particular articles for some time you’ll notice that my general feeling is that the Aussie Dollar could continue to weaken against the Pound as the British economy improves whilst the Australian economy remains under pressure.
The unexpected announcement last week by the RBA that their current interest rate cutting cycle has come to an end has seen the Australian Dollar move by as much as 3% during the last week but over the last 2 trading sessions we have seen Sterling regain most of its previous losses since the announcement.
The Australian economy is still under pressure from less demand from China having slowed down recently to its lowest level for quite some time and with Australian unemployment data much worse than expected this morning we have seen the Aussie weaken by over 1% during today’s trading session.
This poor news for the jobs market has signalled that the RBA’s announcement was rather too early and therefore could open the door for further rate cuts later this year rather than keeping the same.
The Australian jobs data was the second time in a row that the news has been negative and with lower jobs data in the US this has shown to investors that if the US economy is struggling this means that investors will not be inclined to hold riskier currencies including the Australian Dollar. Therefore, I expect Sterling to have a strong end to the week against the Australian Dollar.
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