The RBA cuts Australian interest rates and the impact for Sterling vs the Australian Dollar (Tom Holian)

AUD to GBP: Sterling Higher Versus Aussie Despite Poor GDP

The Reserve Bank of Australia has cut interest rates overnight from 1.75% to 1.5% which was expected after their recent confirmation that inflation has continued to fall down under.

GBPAUD rates have only moved marginally in an upwards direction as the interest rate cut was fully anticipated and the Bank of England are also due to meet on Thursday to discuss their latest set of monetary policy.

The chances are that post-Brexit the Bank of England may look to cut interest rates, increase Quantitative Easing or even a combination of both which could quite easily weaken Sterling exchange rates.

The governor or the RBA Glenn Stevens stated that business investment was one the main reasons for the interest rate cut and also an attempt to encourage consumer spending.

GBPAUD exchange rates have dropped by over 25 cents since the Brexit vote and with most of the UK economic data not yet published until mid-late August this could cause further Sterling weakness especially if combined with an interest rate cut on Thursday.

Indeed, consumer confidence for the UK is at its lowest level since 1990 and according to the Confederation of British Industry business outlook sentiment is also at its lowest levels since 2012.

Generally the feeling surrounding Sterling exchange rates is rather negative and even though the RBA cut interest rates yesterday the overall sentiment is rather concerning for the Pound.

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.