GBAUD exchange rates have recently strengthened by a surprising 3% as iron ore prices increased and we also saw the release of much better than expected Australian Trade balance data.
This has created some excellent short term opportunities to sell Australian Dollars against Sterling but longer term I still think we’ll see Australian Dollar weakness.
Indeed, there seems to be more momentum in calls for an interest rate cut down under.
With senior economists in Westpac, Deutsche Bank and Goldman Sachs all calling for a rate cut then I think the RBA is likely to do something at the next meeting due to be held on 3rd February.
China is Australia’s biggest trade partner and with Chinese trade balance data due out on Tuesday morning this could create quite a lot of volatility for GBPAUD exchange rates.
Australian unemployment data is released on Thursday and the expectation is for 6.3% so anything different could also impact upon Sterling vs the Australian Dollar.
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