Could Australian interest rates be cut further next week?
The pound to Australian dollar exchange rate has been trading between 1.83-1.84 during the course of this week. The economic data from Australia has been rather negative recently and this means we could see an interest rate cut coming in the near future. Yesterday Reserve Bank of Australia Governor Philip Lowe suggested that the economy is at a ‘gently turning point.’ According to reports from Bloomberg the expectation of an interest rate cut next week is 63% and a 85% chance of one happening in November. Clearly there is an appetite for a rate cut in order to provide the economy with a boost.
The Reserve Bank of Australia (RBA) has also confirmed there has been ‘no growth at all in consumption per person’ during the last year. With the RBA having cut rates twice this year I think we will see another rate cut next month. Australian GDP data has been slightly higher in the first half of the year than the previous six months so this could influence the RBA to keep rates on hold for another month. However, owing to the problems between the US and China in terms of the Trade War I think we could see a rate cut as early as next week.
Supreme Court ruling causes volatility for Pound to Australian Dollar exchange rates
Yesterday the Supreme Court ruled that Boris Johnson’s decision to prorogue parliament was unlawful. Therefore, parliament will be reconvening later today owing to yesterday’s decision. We are just over 5 weeks before the end of October and Boris Johnson’s plans are under pressure.
The next meeting EU summit meeting is due to take place on 17th October. It will be very difficult to have a plan in place by then so I think we could even see an extension coming. With so much uncertainty surrounding the UK at the moment the Pound could face further problems especially as we move towards the middle of October.
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