Positive inflation stems the Pound’s fall overnight (Joshua Privett)

AUD to GBP Higher Ahead of UK Inflation Data

Overnight some encouraging noises from the Reserve Bank of Australia’s most recent meeting minutes has since been overshadowed with stronger inflation figures for the UK economy, seeing the Pound rise against most of its currency pairings as a result.

GBP/AUD rates has been relatively stale since the beginning of the week, and the short bit of animation which resulted overnight was eclipsed within a few hours of markets opening in the UK.

The minutes themselves showed quite a confident face for the RBA instead of the morbid tones we have come to expect from them over the last 6 months as they try to talk down their economy in a bid to weaken their currency. This time their attempts were plainly caught out.

The monetary policy statement earlier in the month plainly stated that a resurgence in growth was unlikely to occur until 2018, but the minutes themselves showed a more optimistic tone of what each member of the RBA felt about the future outlook for Australia. In fact, most believed a return to the 4-5% growth figures seen a few years ago may be seen once more as early as next year. As such the Dollar rallied further against the Pound and almost broke through into the 1.66’s.

However, positive inflation data for the UK, the first time this side of 2016 that they have bettered market expectations, has allowed the scales to be balanced, and GBP/AUD central levels now reside back in the 1.67’s.

Moving ahead the next key data release for Australia will be their employment figures coming out overnight tomorrow. Given that the tourist industry is currently in a slumber during mid-winter, low improvements, if any are expected on the number of employed peoples, and certainly no change in the overall employment rate itself.

With the Pound having gained some momentum at an opportune point preceding what can only be described as a difficult data release for the Australian economy, Australian Dollar buyers may see some improved buying rates closer to the end of the week. As such a premium will simply be put on being able to move quickly if some more attractive levels emerge.

One of the more popular options surrounding such data releases are automatic purchase orders. Much of the currency market moves overnight either when those in the UK or Australia are asleep, particularly around key data releases. An automatic buy order means that if you have a target level you wish to achieve when buying or selling Australian Dollars, even if it reached for a few moments, this is secured for you before the inevitable market corrections we have come to expect (exhibit A being this morning’s see-saw effect detailed above).

I strongly recommend that anyone with a buying Australian Dollar requirement in the medium term should contact me overnight before the release on Thursday on [email protected]. We can discuss a strategy for your transfer in order to maximise your Australian Dollar return.

Furthermore, those who have penciled in a purchase for later in the year can use an automatic buy order to pre-book their currency on any favourable opportunities which emerge. Essentially you can fix the price as it is on that moment for a small deposit, and then buy your full amount of Dollars at a date which suits you.

You can also fill out the form below and I will reach out to you as soon as I can to discuss the options open to you and formulate a plan of action on how best approach any transfers you have planned in the short to medium term.

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