Australian inflation data out this morning came in much lower than expected at just 2.9% compared to the expectation of 3.2% and the GBPAUD exchange rate has shot up by 1% already this morning. Inflation figures are often used as an indicator in what to do with interest rates so low inflation often puts pressure on a central bank to cut interest rates. With the RBA in February announcing an end to their interest rate cutting cycle could this provide us with an about turn?
The Bank of England minutes are due shortly and with no talk of QE all eyes will focus on any comments the BoE may make about future interest rate rises. With UK unemployment the best it has been since 2009 and coming in at 6.9% last week much better than expected this could help to push up GBPAUD exchange rates.
The looming news will be how China performs this year as the Australian economy is so heavily reliant on Chinese growth. With China having slowed to 7.4% during the first quarter of 2014 and a fall from 7.7% in the final quarter of 2013 this could harm the Australian Dollar in the longer term. Click on this link for an interesting article http://www.bbc.co.uk/news/business-27045527
If you have a currency requirement to make and want to save money on exchange rates compared to using a bank then contact me directly for a free quote Tom Holian [email protected]