The big news this week for anyone looking to make a transfer with Australian Dollars and Sterling will be the latest interest rate decision due to be released on Thursday by the Bank of England.
The chances have been increasing recently that the central bank will be looking to increase interest rates in the UK as inflation still remains relatively high. UK mortgage approvals have also gone up recently with the number of approved mortgages having risen to a 5 month high combined with a 2 year high for consumer confidence.
However, I think there could be more reasons behind a rate hike than just inflation.
If we cast our minds back to what happened two years ago the Bank of England slashed interest rates very quickly after the Brexit vote in order to stabilise the economy and encourage consumer spending.
Therefore, I think an interest rate hike this week could happen in order to allow the BoE room to cut rates next year if the Brexit talks go badly and we are left with a ‘no deal’ situation.
Even if we do see a rate hike we may not see the usual increase in the value of the Pound vs the Australian Dollar as it will be the accompanying statement and press conference held by the Bank of England governor that will likely affect the value of the Pound vs the Australian Dollar.
Carney has often been a big critic of Brexit and warned that this could cause a lot of pressure on the British economy so I think the rate hike will be closely followed by a rather dovish tone and this could hold back any Sterling advances against the Australian Dollar.
If you would like a free quote when exchanging Australian Dollars or further information then contact me directly and I look forward to hearing from you.
Tom Holian [email protected]