The outlook for the AUD was looking to the Reserve Bank of Australia (RBA) meeting which occurred yesterday. The current trend of the AUD looked as if the RBA would take a ‘dovish’ approach to their monetary policies. Investors had hoped that this would not be the case as the currency would lose momentum. As the minutes were released from the meeting yesterday this seemed to be exactly the case.
Sharp Retreat For Australian Dollar
The Reserve Bank of Australia’s minutes were released yesterday, which caused a sharp retreat of the AUD in the market. The meeting, which covered monetary policy, showed a bank that was still poised to cut interest rates despite current record lows. The key official cash rate was left at 0.75% but the minutes revealed that the possibility of another cut could not be ruled out.
Likelihood of a Further Interest Rate Grows
With the findings of the minutes from the RBA, it is more likely than ever that interest rates will be cut to a new record low before long. Policymakers in the meeting saw a clear case for the fourth rate cut of 2019, but have decided to wait and observe the effects of previous rate cuts before moving forward. The bank highlighted that only gradual progress has been made so far which gave reasoning to potential future cuts. The minutes also revealed that whilst members has judged that lower interest rates were supporting the economy, they also noted the possible negative impacts of lower interest rates on savers and for confidence in the AUD.
GBPAUD Interbank Exchange Rate Slumps Amidst RBA’s ‘Dovish Tilt’
Reports have suggested that the pound to Australian dollar exchange rate had slumped following the news of a ‘dovish’ RBA. The Aussie dollar edge up against the pound despite the proposed considerations of another rate cut. The trading rate was around AU$1.8953 yesterday. The GBP will be hoping for a boost following the YouGov poll, released after last night’s live head-to-head debate between Boris Johnson and Jeremy Corbyn. The pound continues to edge higher on hopes that a Tory majority will be achieved in December’s elections.
In regard to today’s outlook, the AUD could surrender some of yesterdays gains following the release of Westpac’s Leading Index. Should the index slump it could weigh on the AUD. Meanwhile for the GBP, if the polls suggest further support for the Conservatives it will likely give a further boost to the pound sterling.
If you are in the process of buying or selling Australian dollars and would like a free quote then contact me directly, Tom Holian, I look forward to hearing from you. [email protected]