Aussie Dollar Rates Reliant On EU And US Inflation Today (Colm Gilhooly)

AUDGBP Surrenders 0.5600 Level Again as Sterling Gains

The Aussie has enjoyed a good few days and has strengthened slightly following the budget announcements.  With very little Aussie data out in the next couple of days the markets will largely be focusing on EU inflation this morning and US data this afternoon.  With the inflation in Europe at worryingly low levels, the Aussie has made big gains against the single currency, and there is a chance that if the figures are low this morning then it could be the trigger for the ECB to intervene as soon as their June meeting.  To this end expect substantial volatility on AUD EUR exchange rates today.

US inflation figures also come out this afternoon followed by a speech from Janet Yellen so we may see some USD activity.  Personally I think the greenback has been slightly undervalued against the pound and the Euro, however I think the Aussie is probably in a fairer range and may be worth cashing in soon if you are transferring money from Australia.

Sterling took a knock yesterday as although the Bank of England raised growth forecasts and unemployment hit a 5 year low, they were very reluctant to suggest any interest rate rise was on the cards in the near future, stressing rates may remain at historically low levels for some time.  This took a bit of the shine off the pound as prior to the announcements markets had been pricing in the possibility of an earlier move by the Bank of England.  This has created a good opportunity to sell AUD and buy GBP with a 4 cent swing in just over a week.  If you need to transfer money to Australia, or want to sell Aussie Dollars, then feel free to contact me Colm at [email protected] and I would be happy to explain how our services work.