The Pound has had one of its best months in recent times against the Australian Dollar hitting the best rate to buy Australian Dollars with Pounds since June 2016 when the EU referendum was announced.
The Australian Dollar has been struggling with an imbalance between the western part of the country where the mining industry appears to be slowing down whilst the east coast cities seem to be performing better.
The issue for the Reserve Bank of Australia is how they will be able to manage monetary policy going forward. The RBA is due to meet next Tuesday and I think the tone will be very dovish and any talk of a rate hike will be a long time coming.
Inflation has been struggling and the economy is showing signs of a slowdown in Australia and this is another reason for the weakness of the Australian Dollar with GBPAUD rates hitting 1.85 earlier on this week.
America now has a higher interest rate than Australia and this has meant global investors has begun to bypass the previously attractive yield available down under in favour of placing money in the US.
The trade wars between the US and China have caused big problems for the Aussie Dollar and I think there could be worse to come with this particular topic as Trump has already been rather vocal about putting America first.
Meanwhile the economic data from the UK has been improving and only recently the Bank of England announced a 7-2 vote in favour of keeping interest rates on hold which suggests a rate hike may be coming fairly soon with odds relatively high of a rate hike coming in May.
On Wednesday Australia announces the latest Retail Sales data and I think this could come out lower than expected putting further pressure on the Australian Dollar vs the Pound.
Therefore, if you’re in the process of buying Australian Dollars it may be worth holding on until later on next week.
However, if you’re selling Australian Dollars it may be worth organising this very soon.
If you would like further information about how to save money on exchange rates or you would like a free quote then email me directly with your requirements and I look forward to hearing from you.
Tom Holian [email protected]