Overnight the Australian Dollar has fallen nearly two cents against the pound as unemployment figures in Australia came in weaker than forecast. Figures were previously 6% but fell to 6.4% – a significant shift and unexpected. This makes tonight’s monetary policy statement from the RBA (Reserve Bank of Australia) interesting, particularly to see the sentiment from the central bank following this poor release.
Currently the base rate is at 2.5% and rumours recently had been that the RBA may consider another base cut, however RBA governor Glenn Stevens stated recently that he feels current interest rate levels are sufficiently accommodative for economic growth and attracting investment. However with a number of softer data sets the RBA may consider cutting interest rates again to help give the Australian economy a boost and to increase spending. This in turn could put more pressure on the Aussie.
Looking at the data in the UK and today’s Bank of England interest rate meeting should be watched. I would expect the base rate to remain at 0.5% and this to have little impact on the pound, however it is still one to watch. This is released at 12:00.
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