Latest Australian Dollar (AUD) Exchange Rate Forecast to Move vs Pound Sterling, Euro and the New Zealand Dollar after RBA Publishes Meeting Minutes
The week began with the Australian Dollar (AUD) exchange rate trading on the back foot as the Reserve Bank of Australia’s Monetary Policy Statement (published at the tail end of the previous week) was surprisingly dovish.
After the RBA cut interest rates for a second time the ‘Aussie’ rallied as many industry experts bet this would be an end to the central bank’s easing cycle. However, in the policy statement it was implied that further adjustments could be made if the situation warranted them.
A quick foreign exchange market summary before we bring you the rest of the report:
On Wednesday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
Today finds the pound to pound spot exchange rate priced at 1.
Today finds the pound to new zealand dollar spot exchange rate priced at 2.083.
FX markets see the pound vs euro exchange rate converting at 1.163.
The GBP to USD exchange rate converts at 1.25 today.
NB: the forex rates mentioned above, revised as of 8th May 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
The RBA asserted; ‘The board will continue to assess the outlook and adjust policy as needed to foster sustainable growth in demand and inflation outcomes consistent with the inflation target over time.’
The Australian Dollar exchange rate began this week trading in the region of 0.7087 against the Euro (AUD/EUR), 0.5136 against the Pound (AUD/GBP) and 1.0696 against the New Zealand Dollar (AUD/NZD).
Disappointing National Australia Bank Business Confidence and Business Conditions reports failed to lend the Aus Dollar any support against peers like the Pound, Euro and US Dollar exchange rates.
Over the course of the week the Australian Dollar came under additional pressure as China’s Industrial Production and Retail Sales reports fell short of expected levels.
Australian Dollar to US Dollar (AUD/USD) Exchange Rate Rebounds on Disappointing US Data
On Wednesday the Aussie staged a rebound thanks to disappointing retail sales figures from the US increasing the odds of the Federal Reserve delaying the first adjustment to borrowing costs.
However, gains were pared amid concerns that the currency’s rally was unjustified. Better-than-projected initial jobless claims stats from the US also tempered the South Pacific currency’s gains.
Industry expert Stephen Innes noted; ‘The Aussie has entered into consolidation mode in the wake of the big miss on US retail sales, and the 'Kiwi' initially rose against the Greenback on better-than-expected New Zealand retail sales data. The general feeling is the Aussie doesn't look so cheap above .8100, especially with the Reserve Bank of Australia's (RBA) ongoing mantra of depreciation.’
The Australian Dollar prepared to close out the week trading in the region of 0.7049 against the Euro, 0.5088 against the Pound and 1.0753 against the New Zealand Dollar.
Aus Dollar Exchange Rate Forecast: RBA Minutes to Influence ‘Aussie’ Movement
On Monday Australia is set to publish New Motor Vehicle Sales data, but this is unlikely to have much of an impact on AUD/GBP, AUD/NZD, AUD/EUR trading. Industry experts are more likely to be looking ahead to Tuesday and the publication of Australia’s Conference Board Leading Index and the minutes from the RBA’s May meeting.
If the minutes contain hints that another interest rate cut is on the horizon, the Australian Dollar could be pressured lower. On Wednesday Australia will be releasing the Westpac Consumer Confidence Index and the nation’s Consumer Inflation Expectation is due out on Thursday.
Commodity price shifts will also be affecting how the ‘Aussie’ trades and any gains in the price of iron ore, Australia’s main commodity, could bolster demand for the South Pacific asset.
On Friday the Australian Dollar (AUD) exchange rate was trading against the US Dollar in the region of 0.8018
As China is Australia’s largest trading partner, data from the Asian nation may also prove key to how the Australian Dollar performs.
China’s HSBC Manufacturing PMI for May will be of particular interest.