The AUDGBP exchange rate was trading lower by 0.30% as traders hold back on Aussie bets ahead of the US central bank announcement tonight. The pound is also seeing strength against other currencies and could look to move towards the 2021 support levels.
AUDGBP is trading at 0.5552 and the lack of bounce in the Aussie currency lately risks a move to the downside.
Markets Jittery Ahead of Fed Meeting
The Aussie dollar is seeing sellers as risk markets pause ahead of the latest interest rate thoughts from the US central bank, with expectations that the Fed will upgrade their forecasts for economic growth. Investors are mixed on the outcome with some suggesting it will put upward pressure on inflation and interest rates, while other say the Fed cannot move yet. It’s probably a bit of both and the bank finds itself in the same bind as the Australian central bank with hot and cold areas of the economy.
The Reserve Bank of Australia (RBA) said yesterday it is “closely monitoring” the property market as prices and lending soar to new records. This puts pressure on sectors such as travel and hospitality, which aren’t participating in the economic strength of other sectors.
Once economies are back open, we will likely see a rise in inflation pressures and banks will have to tip-toe through the rebound trying not to exert too much stimulus that would fire up asset bubbles further.
The RBA has committed to the idea that it will not raise interest rates for another three-four years and this is encouraging property investors to keep investing.
Aussie Economy Could be 98% Cashless by 2024
Cash is decreasing in retail payments in Australia, with the economy forecast to be 98% percent cashless by 2024.
In Worldpay’s annual Global Payments Report, the group said it had found consumers were increasing their use of digital payment methods at the point of sale. Australia is at the fore front of this move towards digital payments methods. The report also said that e-commerce in the country would grow 46% in that timeframe from A$47 billion to around $63 billion.
In the UK, traders are awaiting the latest interest rate and policy announcement from the Bank of England tomorrow. The bank will do nothing on rates but could update markets on their recovery projections after recent data.
GDP was stronger than expected, while the extension to the furlough program has lowered their forecast for the peak in unemployment. It could be a quiet meeting for the BoE and “no news is good news” as they say. The pound could get a boost from no mention of further stimulus measures in the near-term as the economy looks to reopen further in in late-March and April.
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