Reserve bank of Australia interest rate reaches record lows
The pound to Australian dollar exchange rate is trading higher this morning after the Reserve Bank of Australia (RBA) chose to cut interest rates in the early hours of this morning, negatively impacting the AUD. The cut leaves the Australian base interest rate at 0.75% which is a record low down under. Since the cut we’ve seen the Aussie dollar drop in value with the currency down by over half a percent against the pound, euro and the US dollar.
Perhaps the reason for the sell off for AUD exchange rates is due to this cut coming sooner than expected, and also because the markets are expecting another cut soon. The Australian employment numbers have been declining this year which is putting pressure on the economy. Back in February the unemployment rate was 4.9% and now it sits around the 5.3% mark. Some economists had expected the cut to come in November, so this morning’s cut has caught some traders off guard, which is perhaps why this morning’s decision wasn’t already fully priced into the currency’s value which is often the case with rate cuts.
GBP/AUD forecast: Westpac prediction for AUD
Westpac bank has predicted that the AUD/USD rate could hit a ten-year low so this is a prediction those of our readers with a AUD currency requirement should be aware of.
Boris to unveil Brexit plan to EU leaders: movement expected for Sterling rates
Domestically Prime Minister Boris Johnson is expected to reveal his final Brexit plan to EU leaders in the next 24-hours. He has stated that the reported plans for custom checks at both sides of the Irish border are incorrect. This month could be crucial for the UK economy moving forward and also for GBP exchange rates. The UK is expected to leave the EU at the end of this month, and the deal is expected to be in place by the 19th. If a deal isn’t in place by then, the UK government will be expected to request another extension. If you wish to be updated in the event of a major market movement for the Pound or the Aussie Dollar, please feel free to register your interest with us.