Australian dollar exchange rate 19 july19 July 2016 by News Desk
Biggest gains in the Pound to Australian Dollar exchange rate came following release of the Reserve Bank of Australia’s latest meeting minutes.
Australian Dollar exchange rate changes hinged upon the RBA considering an August interest rate cut due to a slowing economy, weakening inflation and an overvalued Australian Dollar, according to currency specialists TorFX
While many analysts had already bet that the RBA would cut rates again in August, the latest minutes report led to RBA rate cut bets shooting up, causing the Australian Dollar exchange rate to plummet across the board.
New Zealand Dollar (NZD) – while the Australian Dollar exchange rate suffered, the New Zealand Dollar fared better than most of its risk-correlated peers on Tuesday morning, gaining against the ‘Aussie’ and ‘Loonie’. Sterling also dropped against the ‘Kiwi’ as investors bought NZD from its lowest levels following the currency’s previous plummet.
Underwhelming New Zealand inflation data released on Monday saw the New Zealand Dollar falling further following last week’s news that the Reserve Bank of New Zealand (RBNZ) would be making a sudden statement on the state of the economy this week.
The ‘Kiwi’ remains highly pressured as investors await this week’s RBNZ statement, as well as the latest results of the Global Dairy Trade auction set to take place on Tuesday.
If prices of New Zealand’s most lucrative commodity (milk) continue to drop, the New Zealand Dollar will find it even more difficult to hold its ground.
Australian dollar exchange rate
Pound Sterling (GBP) – The Pound trended solidly against most major currencies yesterday as investors reacted hopefully towards the buyout of UK tech firm ARM Holdings. ARM was purchased by influential Japanese communications company, Softbank, in a move that saddened many UK businessmen who valued the independence and influence of ARM on the world stage.
However, the buyout improved the mood in UK markets. The buyout deal’s huge sum, at £24.3bn, is a quarter of Britain’s yearly trade deficit. Still less than a month since the Brexit vote, the news restored hopes that UK investments would still be appealing despite Brexit jitters.
Analysts have suggested that the Pound’s low value means that more deals of this variety could be made in the coming months, improving UK business confidence.
Hawkish comments made by Bank of England (BoE) official Martin Weale also slightly boosted Sterling. Weale suggested that the bank need not necessarily slash the key UK interest rate, but instead focus on other easing measures.
During Tuesday’s session, investors will want to focus on Britain’s key June Consumer Price Index (CPI) report. Inflation in June could provide an insight into the health of the UK’s pre-Referendum economy.
US Dollar (USD) – ‘Cable’ gained around a quarter of a cent during Monday’s session. News that UK tech firm ARM Holdings had been bought by Japanese company Softbank improved UK business sentiment, and slightly boosted the Pound.
The Pound to USD exchange rate remains well below pre-Referendum levels, deep in lows not seen since 1985. While it is unlikely to recover significantly in the coming week, it may be able to hold its current levels if investors maintain a dovish stance on the ‘Greenback’.
News that Morgan Stanley was not expecting a Federal Reserve interest rate hike until 2018 weighed on the US Dollar, but USD currency remained solid on Tuesday due to a drop in risk sentiment.
Euro (EUR) – The Pound to Euro exchange rate edged higher during Monday’s session as investors responded positively to the news that ARM Holdings had been bought out by Softbank.
Eurozone news is not likely to be considerably influential amid all the recent Brexit-related panic in the markets. German organisation ZEW is set to release its latest current situation and economic sentiment surveys for Germany and the Eurozone. German economic sentiment is forecast to fall from 19.2 to 9, and a low Eurozone score following June’s score of 20.2 may also weigh slightly on the Euro.
Investors are more likely to look forward to Thursday’s European Central Bank (ECB) meeting. The ECB is not expected to be making any policy changes in July, but could discuss the effects of the Brexit on the Eurozone economy as well as hint at the bank’s tone going forwards.
Canadian Dollar (CAD) – The Pound to Canadian Dollar exchange rate advanced on Monday due to news that JP company Softbank had completely bought out UK tech firm ARM Holdings.
Sterling dropped on Tuesday as market sentiment wore off and investors indulged in a little profit-taking from its recent levels. However, it dropped less against the Canadian Dollar than other currencies as low risk-sentiment left the ‘Loonie’ weak. Softer crude oil prices due to high US supply also continued to weigh on Canadian Dollar favour.
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