Sterling vs Australian Dollar exchange rates have traded within a fairly tight range recently but with the Reserve Bank of Australia due to publish the recent minutes on Tuesday this could cause big movements for exchange rates.
The Australian economy has slowed recently but the economic data has been varied.
Only a few days ago Australia confirmed 40,000 new jobs were created which is good news but the effects of a Chinese slowdown has kept the Australian Dollar under pressure.
The real problem for the RBA is that the property market down under appears to be spiralling out of control and if they cut interest rates this could cause more problems.
However, what they have looked at doing recently is to increase the cost of borrowing without interfering with the base rate.
To me it is a matter of time before the RBA cuts rates but I think they will wait to see what happens with interest rates in the US before making any change to monetary policy.
It will be the comments made by the RBA that will affect exchange rates and any jawboning is likely to weaken the Australian Dollar.
My prediction for the week is for Sterling to rise vs the Australian Dollar.
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