For months the Reserve Bank of Australia have been actively fighting to lower the value of their currency. This follows the common central bank policy for struggling commodity based economies in all out price wars with their competition.
Yesterday, Deputy Governor Philip Lowe created a paradox on the foreign exchange markets. He described the recent ‘flexibility’ of the Australian Dollar as being key to the positive adjustment of the Australian economy in the wake of a slowing China.
Yet this positive tone has caused the Australian Dollar to strengthen, as this translates into returning confidence. Current investor patterns point to long term positions on bottomed-out commodity currencies who are being forced to diversify in the face of the similarly bottomed-out commodities market. Lowe’s speech drew much of that funding to the Australian Dollar.
Keeping a morbid tone would have likely been more beneficial to the economy if he is following his own logic. However, it looks bad politically for the RBA to not be reporting at least some success!
GBP/AUD rates alone have fallen by more than 2 cents since the highs of yesterday. This is a lesson that the commodity currencies, particularly in the current global situation are the most volatile of all. Rates may come back up, but there is little indication of the next few months that we’ll see any sudden spikes up. China has now put ‘circuit breakers’ into their stock market to prevent any further runs and have started a new program of state investment into the financial sector to enforce stability.
The current rates for buying Australian Dollars are still fantastic and something that most buyers would have dreamed of at the start of August. I strongly recommend that anyone who has Australian Dollars to buy to move sooner rather than later. Take the first step by contacting me directly on 01494 787 478 and ask for Joshua. Quote this article for a free quote on your transfer and some tailored advice for your situation. I offer a rate-beating service to guarantee you’re getting the best rate of exchange. email@example.com