Although the Australian Cricket Team is very strong against us ‘Pommies’, the Pound is currently lording over the Aussie Dollar!
The Australian Dollar awaits the minutes of the RBA (Reserve Bank of Australia) minutes from their recent meeting. The minutes are released at 00:30 UK time and will shed light on the RBAs thinking of the interest rate reduction. The ‘cash’ rate cut was the first in 18 months, and helped GBP AUD hit 2.0 for the first time in 6 years.
The Australian economy is suffering an increase in unemployment and a substantial slowdown in economic growth. Many economic advisers are indicating a move away from relying on Iron Ore exports to China as a main source of national income. The news hasn’t been easy for those in Western Australia, as the Iron Ore mines make up a large and very lucrative sector of the jobs market. I personally have assisted many in re-locating back the UK following mine closure – unfortunately a very real possibility. The RBA have also indicated that there will be at least one further rate cut this year, so it will be key to see if there is an indication as to when that will be.
Those with an Australian Dollar trade this week should pay close attention to not only the RBA minutes tonight, but also the US Federal Reserve minutes on Wednesday evening. The strength (or weakness) plays a huge part in moving every single other currency in the world. As the old saying goes ‘when the US sneezes, the world catches a cold’. Investors treat the US Dollar as the safe haven and if the FED minutes are USD positive, you may see southern hemisphere currencies consequently weaken. I think that there is a good chance of this, as the US are looking to raise their interest rate in 2016. Therefore if you are Selling AUD, you may want to get your exchange done prior to said minutes to avoid selling at a figure substantially below 0.50!
If you do have an exchange requirement, please feel free to drop me a line on 01494 787 478.
Alternatively drop me an email with your requirement – AJB@currencies.co.uk