The AUD has been under growing pressure of late, with the Pound finding plenty of support above 1.85.
Australia’s economy remains stagnated, with concerns over global trade and uninspiring growth figures, handicapping any sustainable advances for the AUD.
This period of relative economic downturn is causing investors to shy away from the AUD, which like all commodity-based currencies is struggling to maintain its levels, due to investors risk appetite being minimal.
Yesterday’s Gross Domestic Product (GDP) figures, along with last night’s Retail Sales figures are likely to reinforce this negative undertone, although the silver lining for those clients holding AUD is that the poor figures have not yet caused the AUD to slip further against GBP. GDP figures showed a drop to 0.2% month on month and whilst Retail Sales data showed an improvement from last month’s reading of -0.4%, they still came out under the markets expected result at 0.1%.
It is no real surprise then that the Reserve Bank of Australia continue to hold interest rates at their record lows of 1.5%. This is also causing the AUD to be less attractive to investors, who in years gone by would have looked at Australia’s previously high interest rates as an opportunity for a high yielding return on their funds.
Whilst the current climate is hardly like to inspire longer-term confidence in the Australian economy, things could be set to get wore before they get better.
One of Australia’s largest banks Westpac recently release their economic forecast for the rest of the year, in which they predicted the RBA would cut interest rates again, possibly twice by November. If this scenario comes to fruition, interest rate should fall to new record lows of 1%. This in turn will likely have negative ramifications for the AUD.
Whilst the UK continues to try and find some common ground with the EU in regards to the Irish backstop arrangement, as of yet, no breakthrough has been made. With the second “meaningful vote” fast approaching, UK Prime Minister Theresa May is running out of time to push through the amendments she will need, in order to convince parliament to vote in favour of her Brexit deal.
The markets focus will remain firmly on the UK ahead the current Brexit deadline of March 29th but any breakthrough in talks with the EU and a positive outcome to next week’s vote, is likely to drive investor confidence in the Pound and a move up to and even through 1.90 is certainly a feasible outcome.
If you have an upcoming AUD currency transfer to make, you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company, we have over nineteen years’ experience in helping our clients extract the most from any given market.
Our award winning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
Feel free to email me directly on [email protected] to find out all the options available to you ahead of your currency transfer.