The Australian dollar is reacting heavily to events in the US at present and the tone coming out of the US Fed is slowly starting to soften. The Aussie dollar is heavily impacted by the level that interest rates are set in the US and as rates rise in the US this should in theory put pressure on the Australian dollar.
The expectation was for three rate increase in the US throughout 2018 although that it may just be a case of a maximum of two and this is creating a bit of volatility for the Aussie. It was starting to look like the Reserve Bank of Australia may need to hike to accommodate such policy around the world but that first interest rate hike from the RBA may not be as forthcoming as the markets had expected and this is seeing the dollar weaken off.
GBP AUD has seen a small pickup in the rates with levels moving closer to 1.74 for the pair. A move higher to 1.75 looks like a realistic target for those looking to buy Australian dollars although the ongoing Brexit negotiations are also playing a role in where rates are heading.
Clients selling Australian dollars could see a return to 1.70 for AUD GBP on some strong economic data down under but the risk is that the ongoing Brexit negotiations could dictate the path of sterling. The Brexit discussion will soon move on the heated issue of future trade and the pound is likely to see considerable shocks as news is released. Anything positive from the UK and EU that there is likely to be a future trade deal is likely to see the pound rally further.
Australian unemployment data are released overnight and could create some volatility for the Aussie whilst Chinese GDP data could also impact on the rates due to Australia’s large export market to China.
To discuss how these event have a direct bearing on your currency requirement please feel free to get in touch with me at [email protected] and I will be happy to talk you through your options and help you with the transfer.