The pound to Australia dollar rate has been moving higher on the back of the latest improving economic data for the UK and fresh fears over when the RBA (Reserve Bank of Australia) will raise interest rates. We could see the Federal Reserve in the US raising rates which has been a big driver on Australian dollar exchange rates. The strengthening of the US dollar has seen a weaker Australian dollar as they are closely linked.
Any weakening of the Australian dollar lately can be partly attributed to the scaling back of interest rate expectations for the Australian economy. Overall the predictions for the Australian economy had been very strong and this had seen the Aussie stronger. This has been scaled back recently with the Aussie weakening as the RBA scaled back their forecasts.
The US dollar is also a factor as it has been rising, it is looking more than likely that the US will raise their base rate which will see the US dollar stronger. As a higher yielding currency the Australian dollar has been very popular but now the US dollar is challenging its dominance. The market is now bracing itself for lower for longer Australian interest rates which is why the currency has weakened.
with sterling finding some support this trend could continue for longer, the conditions that have created it don’t appear quite ready to subside. For now it appears this market will favour Aussie buyers and any clients looking to sell Australian dollars for pounds might need some assistance with strategy.
If you have a transfer to make buying or selling Australian dollars then please don’t hesitate to let us know so that we can monitor the market and update you on the latest strategies to be aware of in trying to maximise your transfer. If you wish for more information please speak to me Jonathan Watson by emailing [email protected].
Thank you for reading and I look forward to hearing from you.