According to the Reserve Bank of Australia interest rates down under may be kept on hold for quite some time. In their most recent statement earlier this week the central bank has suggested that any change will be ‘gradual.’
The latest set of growth forecasts from the RBA will be announced on Friday and although unemployment is looking very strong in Australia there are concerns being raised that Retail Sales are struggling.
Indeed, the RBA governor Philip Lowe has said that ‘household incomes are growing slowly and debt levels are high’, which leads me to think the RBA will keep monetary policy the same until we see more positive news.
The last time we saw an interest rate hike in Australia was back in 2010 and rates have remained on hold down under now for a year and a half so don’t expect any rate changes to be coming anytime soon.
The problem for the economy in Australia is that over the years it has benefited from a higher yield in interest rates for global investors than many other developed economies.
However, with the US having increased interest rates three times during 2017 and on course to increase interest rates again in March this is leading investors to move their money away from commodity based currencies including the Australian Dollar and into the US Dollar.
Overall this is fairly good news for anyone looking to send money to Australia as it means GBPAUD exchange rates have remained positive recently and although we have seen the odd drop in rates, generally speaking the direction has been positive in Sterling’s favour.
Looking ahead to tomorrow the Bank of England are set to meet to announce their latest monetary policy decision and although no change is expected any hints of a rate hike coming further down the line to control inflation could see the Pound go in an upwards direction.
If you have a need buy or sell Australian Dollars in the near future then feel free to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency compared to your bank or another currency broker.
Even a small improvement in the exchange rates can make a big difference so feel free to to email me and you may find you could save yourself hundreds if not thousands of Pounds. You can email me (Tom Holian) on [email protected] and I will respond to you as soon as I can.