Sterling Australian Dollar exchange rates have dropped to their lowest levels in months after RBA governor Glenn Stevens claimed no interest rate change will happen and this had led to some big drops for Sterling vs the AUD$.
Even though the economy is growing slowly and inflation is low he did state that a cut in interest rates would be nowhere near as effective in stimulating the economy when rates were cut from higher levels in the 1990s.
The next RBA meeting will take place in February so clearly no interest rate change will occur for the next few months.
Indeed, there have been persistent rumours of an interest rate cut over the last few months downunder so the comments from this week have put paid to any speculation for the time being.
With the slowdown in China continuing and the geopolitical uncertainty regarding the recent terrorist attacks this would typically have caused a sell off for the Australian Dollar but the rhetoric used by Glenn Stevens has given the AUD some much needed support.
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