The price to buy Australian Dollars with Pounds has broken through 1.70 on a number of occasions through out today following the Reserve Bank of Australia’s decision to keep interest rates on hold.
May investors were hoping for more of a hawkish tone which means an interest rate hike but the RBA was rather cautious and stayed very neutral with its announcement.
Australian interest rates are currently sitting at 1.5% which is the lowest they have ever been and as they were kept on hold this has seen the Pound making gains vs the Australian Dollar.
The RBA are also concerned with how strong the Australian Dollar is against both the USD and the Pound and if they suggested an interest rate hike could be coming this could result in further strength for the AUD vs the Pound.
RBA governor Philip Lowe has stated that ‘consumption growth remains subdued, reflecting slow growth in real wages and high levels of household debt.’ These combinations mean that any rate hike could cause problems for the economy down under hence the soft rhetoric.
Indeed, any suggestion of any interest rate change coming was not mentioned so for me I think we could see further short term gains for the Pound vs the Australian Dollar coming soon.
The next catalyst for GBPAUD movement could come on Thursday with the release of the latest Australian Trade Balance data so keep a close eye out for what happens.
Having worked in the foreign exchange industry since 2003 for one of the UK’s leading currency brokers I am confident of being able to save you money on exchange rates compared to using your own bank when buying or selling Australian Dollars.
If you have a currency transfer to make and would like to save money then email me directly with a quick description of your requirement and I look forward to hearing from you.
Tom Holian [email protected]