The pound to Australian dollar interbank exchange rate stands at 1.8998 today at the time writing. By comparison, back on Wednesday 8th January, sterling was as high as 1.9151 versus the so-called Aussie dollar, so it’s since weakened by 0.81%.
The AUD has gained against the GBP in the last two days, in part because Australia’s economic data this week has exceeded forecasts.
For example, today we’ve learnt that Australia’s retail sales rose by 0.9% in November, well above forecasts for a 0.4% gain, boosted by Black Friday. In addition, this Wednesday 8th it was revealed that Australia’s building permits increased by 11.2% in November, easily exceeding forecasts for a 2% increase.
So this suggests that, in spite of the bush fires continuing to ravage millions of acres of Australia’s territory, the economy continues to expand. This has helped lifted the Australian dollar.
Australian Dollar Climbs, as RBA Less Likely to Cut Interest Rates in February
These upbeat economic releases Down Under have strengthened the Australian dollar, in particular because they make it less likely that the Reserve Bank of Australia (RBA) will cut interest rates in the foreseeable future.
Until recently, it was thought that Australia’s central bank could cut borrowing costs below their current 0.75% to a new all-time low, perhaps as soon as their next meeting, on February 4th.
After all, lower interest rates cut the cost of taking out a loan in Australia, thereby benefiting the economy, and compensating somewhat for the ongoing natural disaster. So this hope has boosted the value of the AUD too.
GBP May Be Affected by UK Green Shoots, Conciliatory Trade Talks
However, looking forward, sterling’s value versus the Aussie dollar could be affected, first by signs of green shoots in the UK economy. This week we learnt that UK business confidence has improved following the Conservatives’ election victory last month, which could increase Britain’s economic growth in 2020.
Also, new European Commission President Ursula von der Leyen has signalled a conciliatory approach to the UK/EU trade talks, thereby potentially lifting UK business confidence too. In particular, President der Leyen said that “We will have to prioritise” to accommodate Prime Minister Boris Johnson’s legislation, to finalise the trade talks by December 31st 2020.
For more information on AUD exchange rates for an upcoming currency transfer, you can email me, Matt Vassallo, using the form below.