The pound to Australian dollar exchange rate has fallen lower again with rates for the GBP/AUD pair sitting at 1.7760. The recent sharp drop has provided an excellent opportunity for those looking to sell Australian dollars to buy pounds.
RBA minutes: Suggestion of further interest rate cuts?
The Reserve Bank of Australia minutes released overnight suggest that the RBA is ready to cut rates further if it deems it necessary. The RBA has now seen two back to back interest rate cuts taking the headline level to the lowest on record at just 1%. It would appear that any further policy action will now be dependent upon the performance of the economic data down under.
Focus now moves to Australian unemployment data released 18th July which could have some bearing on the central banks thinking going forward. Chinese Gross Domestic Product numbers fell from 6.4% to 6.2% in line with expectations and although it takes growth to the lowest levels for almost 30 years there was some upside from the monthly numbers. The markets appear to have felt more comfortable with the recent monthly data helping to boost the Australian dollar.
Brexit update: New Prime Minister to be announced next Wednesday, how will GBP/AUD exchange rates react?
Brexit continues to be the dominant driver for pound to Australian dollar exchange rates and it is widely expected that the new British Prime Minister will be announce next Wednesday. Depending on how quickly the incoming PM takes to task the issue of Brexit the pound to Australian dollar exchange rates could see high volatility. The path of Brexit and whether or not Britain leaves with or without a deal continues to be the pivotal issue on whether the pound strengthens or weakens against the Australian dollar. Boris Johnson is widely expected to be votes in as Prime Minister as opposed to the Foreign Secretary Jeremy Hunt. Next week could see high volatility for GBP vs AUD on the back of these important developments.
UK economic data this week
Meanwhile UK Consumer Price Index inflation data are released on Wednesday with retail sales numbers on Thursday. Inflation has started to become a concern for the Bank of England which is expecting to see the index jump higher going forward. For the time being the growth forecast have been revised lower citing global growth concerns and Brexit as the principle reasons. If you would like to be kept up to date with market movements for an upcoming currency transfer, feel free to contact me directly using the form below.