The Reserve Bank of Australia kept interest rates on hold this morning at 2% which has seen the Australian Dollar strengthen vs the Pound.
This came as no real surprise but the absence of any suggestion as to future changes has kept the Aussie Dollar strong.
Although events in China are clearly worrying for the Australian economy for the short term at least this has been overlooked with today’s decision.
The real problem for the RBA is that with Australian house prices going up by 17% during the last 12 months an interest rate cut would any further fuel to this problem and clearly house price growth at this rate is unsustainable in the long term.
This news has provided a good window of opportunity for selling Australian Dollars into Sterling but longer term I still think we will see GBPAUD exchange rates go in an upwards direction.
With the US Federal Reserve poised to raise interest rates before the end of the year if this happens this would likely see a sell-off for the Australian Dollar causing global investors to place money into the US.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian [email protected]