The Aussie Dollar rose against the pound as unemployment figures Down Under showed an improvement in the jobs market. The headline rate dropped from 6.2% to 6.1% and has boosted confidence in AUD just as the shine seems to be taken off the pound. The FOMC minutes published last night showed they are keen not to raise interest rates too soon stateside.
This suggests there will be cheaper funds available to markets for longer which has been good news for the Aussie Dollar over the last few years as it has helped investment in the mining sector but also seen people use the money to invest in Aussie interest rate returns and profit on the difference between their low borrowing costs and higher interest rate returns (called a carry trade).
However sterling has rallied in later trading today coinciding with Aussie weakness in advance of RBA Assistant Governor Edey’s speech. There is always a risk that the Aussie could be talked down by the RBA and the last 48 hours just go to show how tricky it can be to predict currency movement with rumour and uncertainty having as big an impact as facts and hard data. If you need to make a currency transfer, and want to get the best exchange rate, then feel free to email Colm at [email protected] and I would be more than happy to help.