Will the RBA cut interest rates next week? (Tom Holian)

GBP to AUD Steady as Markets Consider BoE and RBA Rate Cuts

The Australian Dollar has come under a little bit of pressure recently against the Pound as inflation results for the Australian economy came in overnight at 1% compared to the expectation of 1.3%.

Inflation has been struggling down under recently and with prices not rising this is likely to impact the health of the economy going forward. The target for Australia is between 2%-3% and this is only the third time since 1996 that the target has not been met.

Usually falling inflation results in a central bank looking to cut interest rates and this could happen when the Reserve Bank of Australia meets next week on 2nd August.

With interest rates at historically low levels in Australia any further interest rate cuts could cause the AUD to weaken which is good news for anyone looking to buy Australian Dollars with Sterling.

However, also next week the Bank of England meeting takes place on 4th August and there is a wide expectation that the BoE may look at cutting rates themselves or even increasing the volume of Quantitative Easing, both of which could be detrimental to the strength of Sterling.

If you’re concerned about what may happen to GBPAUD exchange rates over the next few weeks it may be worth considering buying a forward contract which allows you to fix an exchange rate for a future date for a small deposit.

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]

I look forward to hearing from you.