The Pound has hit its best rate to buy Australian Dollars since autumn 2016 as the US has growth rate has hit a 3 year low.
Generally speaking whatever happens in the US economy will impact upon global foreign exchange rates and typically when the US shows signs of economic slowdown this negatively affects commodity based currencies including the Australian Dollar.
This is one of the reasons why the Australian Dollar has started to fall in value in recent weeks. In his election campaign Trump proposed that he would raise growth to 4% which is very different to the data which showed annual growth in the first quarter of just 0.7%.
Combined with the announcement that the UK will be holding a snap general election in June this has also given the Pound some much needed support against all major currencies over the last fortnight. Political stability has returned to the UK at least in the short term which has given the Pound some assistance.
On Tuesday the Reserve Bank of Australia will announce their latest interest decision and as the property market is still very strong down under then they are in a difficult position as if they do cut interest rates then this will see property prices go up even higher as borrowing costs will fall. Therefore, I would be surprised to see any change in monetary policy when they meet on Tuesday.
With the Pound now having comfortably broken past 1.70 on the Interbank level I think we could see further gains for the Pound vs the Australian Dollar over the next week.
If you have a currency transfer to make in the days, weeks or even months ahead then feel free to contact me directly. Working for one of the UK’s leading currency brokers I am confident of being able to offer you better exchange rates when buying or selling Australian Dollars compared to using your own bank. A quick email could save you a lot of money and I look forward to hearing from you.
Tom Holian [email protected]