The Australian dollar has seen a bounce today following the US Fed decision last night to hold interest rates as widely expected. The US Fed in practice would like to hike again as they initially set out to do at the end of last year but there has been so much uncertainty as to whwn it will next with all the global economic uncertainty.
Following last night’s meeting the markets are not convinced there will be an additional rate hike at the September meeting. The Australian dollar has benefitted from this news with funds returning to the Australian dollar which has helped strengthen it. AUD GBP has moved back below 1.75.
Next week is paramount for Australian dollar exchange rates with the Reserve Bank of Australia (RBA) meeting. This is a very tough one to call and it is not clear whether we will see an interest rate cut at this meeting or whether the RBA wait until the next meeting. It really could go either way next week but it is important to state that when the cut does happen we are likely to see the dollar weaken considerably.
The last time the RBA cut rates and surprised the markets the dollar dropped substantially and moved by almost 15 cents. It was only after Brexit that rates then rebounded back. Nest Tuesday is a very important day for the dollar and should determine its new direction.
Selling Australian Dollars?
For anyone selling Australian dollars then it would be worth considering moving before the next Australian interest rate cut to avoid disappointment. This applies for AUD GBP and AUD EUR in particular. If the rate cut doesn’t happen on Tuesday then it should be on the cards for the following meeting.
If you have an upcoming GBP or AUD currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on firstname.lastname@example.org