The Federal Reserve bank in the United States will unleash their latest Interest Rate decision tomorrow evening at 7pm UK time. The pound to Australian dollar exchange rate is looking precarious as we approach this latest news, but also news from the Bank of England this week. Overall I would not be surprised to see the Australian dollar weaker as the market finds that betting on the US dollar’s ascendancy is much more interesting than backing the Australian dollar.
The Australian dollar is holding one of the higher interest rates of the leading global economies at 1.5%, with a hike in the US bringing them to just 0.25% below, the expectation is that the Australian dollar will be sold off as investors adjust their positions to reflect more of a holding of the US dollar, believing the US dollar will rise further in the future.
If you have a transfer buying Australian dollars in the future Thursday might see some better rates but should the Fed decide to hold off raising rates, we could see the US dollar weaken which would see the Aussie gain strength. The Aussie could also find favour against a weaker pound which is having a very tough week following the unexpected outcome from the UK election.
Should you be considering buying or selling Australian dollars in the future current evens are very important, Aussie buyers will I am sure be very keen to try and get above the magic 1.70 mark again although of course they could easily find themselves getting worse should events take an unexpected turn as they can!
For more information at no cost or obligation please speak to me Jonathan Watson by emailing [email protected]. Thank you for reading and I look forward to hearing from you!