First things first – Our thoughts are with the family and friends of the victims of the Sydney café terrorist attack.
Aussie Dollar has already seen a fair swing today morning as after opening in the 1.9065 region, GBP AUD went back under 1.90 for several hours. Sterling has shifted quite erratically during the latter minutes of the morning following a surprise reduction in UK inflation (Consumer Price Index), now down to 1% against a target of 2%. However even though Sterling weakness would be expected for a sustained period, the Aussie has weakened further still to surprise levels of over 1.91. Morgan Stanley has lowered it’s growth forecast today for Iron Ore (Australia’s key export), hence the weakness. Morgan Stanley have indicated that the reduction in Iron Ore value could lead to mines being mothballed, potentially costing many people their jobs.
This is quite a bleak outlook for the short to medium term and coupled with the Reserve Bank of Australia’s temptation to raise interest rates, a very rocky start to 2015 can be expected. If you have a currency exchange requirement, please feel free to contact me directly on 01494 787 478 / AJB@currencies.co.uk