GBP/AUD back above 1.71 ahead of the RBA interest rate meeting overnight
Sterling exchange rates have recovered back above the 1.71 level ahead of tomorrow’s interest rate meeting announced by the Reserve Bank of Australia (RBA).
It is widely expected that the RBA will keep the base rate on hold at 1.5% something that is unlikely to have much impact on the exchange rate.
What could impact the rate however will be the accompanying statement. In this statement it will indicate the reasons as to why the RBA have acted as they have but will also give clues as to what future monetary policy the central bank may have in store.
If the statement is relatively dovish (dove refers to an economic policy that promotes monetary policies that involve low interest rates) then I would look for the Australian Dollar to weaken further causing the current volatility between GBP/AUD to continue. To highlight this volatility the GBP/AUD rate has now moved just shy of 3% between its high and low value in less than a week.
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