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Anthony from Moneycorp

The Australian Dollar - What to Watch

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The two key releases for the Australian Dollar are the minutes of the last Reserve Bank of Australia (RBA) meeting and employment data.

Analysts are currently split over whether the RBA will cut interest rates or not so the RBA minutes will be a closely watched deciding factor in the debate with implications for the Aussie. If the members of the RBA policy committee appear to endorse a possible rate cut it would weigh on the Australian Dollar. Lower interest rates weigh on currencies as they make the country less attractive as a destination for foreign capital inflows.

The other main release is employment data. This has traditionally been quite strong in Australia and one of the bright spots of the economy. The risk lies with it weakening and surprising the market negatively. This would weigh on the Aussie.

Current Status

While the immediate outlook for GBP/AUD has softened, Sterling is nevertheless still looking to notch up a weekly gain on its antipodean counterpart.

Brexit aside, a key driver of GBP/AUD has been a softening in expectations for the outlook of the Australian economy.

The question being asked by foreign exchange markets is whether or not the slowdown in Australian economic momentum is great enough to warrant interest rate cuts at the Reserve Bank of Australia (RBA).




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