GBP/AUD rates have seen some impressive gains in the last week due mostly to an RBA decision to cut rates to a record low – 1.75%. Market sentiments showed signs of improvement for the Aussie Dollar with commodity prices gaining ground. This lead to an overpriced Dollar which is bad news for a currency heavily reliant on its exports.
RBA’s Interest Rate decision
The RBA’s decision to cut rates came after market sentiments dampened. Oil nations failed to agree oil production levels which saw commodities investments fall. Concerns over the Chinese economy and poor Aussie CPI data forced the RBA to cut rates and thus weaken its currency.
This double edged sword effect should assist in improving inflation within the economy, Aussie buyers should be jumping on the opportunity to purchase during this time.
RBA to cut rates to 1%
There are fresh talks that the RBA will cut rates to 1% which will weaken the currency again, even with the fast approaching EU referendum, GBPAUD rates could cross the 2.0 barrier if this decision materialises. As of today GBPAUD rates are steadily moving towards the 1.97 mark. Tomorrow sees the release of home loan figures as well as RBA’s Malcolm Edey speech on the stability of the economy which could create volatility for the Aussie Dollar.
The bank of England’s Interest rate decision is also due on Thursday which could pave the way to an Interest rate cut, the effect of the EU referendum on business has been noted and we may see Sterling weakness as a result. Those looking to buy Aussie Dollars may want to take up the opportunity ahead of the Interest rate decision.