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Anthony from Moneycorp

Will the GBP/AUD pick up again in the next few weeks?

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Over the last 4 weeks GBP/AUD exchange rates have increased by 6 cents making a AUD $300,000 purchase £5,340 cheaper. The slowdown in Australia is putting a major strain on Australian dollar exchange rates. The housing market is under severe pressure due to the tightening of lending standards throughout 2018. China is slowing due to the ongoing trade war which means less commodities are leaving Australian shores and the Reserve Bank of Australia have hinted at cutting interest rates in a bid to stimulate economic growth.

All in all, it’s hard to see how the tides will change for the Australian economy unless major changes are made to monetary policy and the US and China secure a trade deal that works for both parties.

One positive is that unemployment numbers have remained stable over the last couple of months. This week Australia will release their latest unemployment numbers and 5% is expected. If the number is released at 5%, I expect the Australian dollar could benefit on Thursday morning. However earlier in the week, the RBA minutes and House Price index numbers are released on Tuesday morning. Both releases I expect could disappoint, therefore waiting till Friday to sell Australian dollars seems a risky strategy.

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