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Hi All,

As promised here’s a brief update on what’s been happening with the AUD Dollar over the last week.

This week the AUD has been under sustained pressure as the market reassessed its yield expectations. The MPC minutes sparked the initially AUD selling stating that the decision to hike interest rates in December had been “finely balanced” thus undermining expectations of a February rate hike. This was further compounded by a disappointing GDP number (+0.2%q/q against +0.4% expectations) and comments from the RBA’s Ballellino that he felt Australian interest rates had already returned to “normal” levels considering the increased spreads the banking establishment is taking over the OCR. At the start of the week expectations for a February rate hike stood at 45% this was down to 16% by Friday. The AUD also suffered latterly in the week on risk aversion following year end liquidation in equity markets. In the absence of any significant data and a general lack of liquidity; equity markets are likely to be the primary driver of the AUD’s direction this week..

GBP/AUD Movement – High’s & Low’s of last week (14/12/09 – 18/12/09)

High’s: 1.8306
Low’s: 1.7772

A movement of:3%.

Difference on £200k

High: AUD366,120
Low’s: AUD355,440

Difference of: AUD10,680

Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.

A further update will be added next week.


Jon Sermon
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