After a rough few weeks, the Aussie dollar seems to be on the rebound, seeing gains against most major currencies overnight. These gains are great news for Aussie travellers getting ready for an Easter escape. As it stands, one Aussie dollar will buy you:
The Australian dollar remains at the higher end of its recent tight trading range off the back of firmer oil and iron ore prices. There are still some mixed messages coming out of the global economy (see commentary below).
On the domestic data front, household lending figures for February have come in much better than market expectations, although finance levels remain broadly low compared to previous years. Lending for housing is a good leading indicator of movements in house prices. Home loans for the month of February rose 0.8% ahead of expectations with a 0.5% increase, and owner-occupier loan value climbed 3.4%, well ahead of a 1.0% expected increase. Investment lending also rose 0.9%, this was much better than the expectation of a 1% decline.
Although this data is improving, it is important to recognise that it is well below levels seen over the last five years or so. There are some signs that the downward momentum in house prices is losing steam though with smaller falls in Sydney and Melbourne in March and improving auction clearance rates. This may well lead to the RBA not needing to reduce our interest rates, however, we will continue to monitor all data, particularly the all-important employment data.
The Euro plunged in value against the Australian dollar last night after the European Central Bank (ECB) cut its growth forecasts (GDP projection from 1.7% to 1.1%) and inflation projections (cutting core inflation projections by 0.2%).
The ECB also announced new stimulus measures to try and inject some life into the weakening economy. The ECB’s move overnight has heightened concerns around the global economy and seen a little bit of a rise in risk aversion.
Whilst this obviously isn’t great news for Europe, it is pretty good for Aussie Travellers planning a trip to any country that uses the Euro. Should the global economy continue to slowdown, however, it may have a negative effect on the value of the AUD as investors seek out currencies that are less risky than the Aussie Dollar.
The United Kingdom is still in turmoil as we hurtle towards the latest Brexit
deadline of April 12th… a.k.a this Friday. Prime Minister Theresa May and Labour leader, Jeremy Corbyn, have been holding talks with the hope of securing a Brexit compromise. As it stands, they have yet to reach an agreement.
Talks will resume tomorrow where May and Corbyn will continue to discuss the withdrawal agreement, as well as a potential further extension to Brexit. Theresa May is hoping to extend the deadline until the 30th of June, however, there is also talk of potentially extending it by a year. Sigh. If either of these extensions is granted by the European Union later this week, the UK will need to take part in EU elections that begin on the 23rd of May.
Finally, overnight, legislation to extend the Brexit process and avoid a no-deal situation has received royal assent. Royal assent is the process of getting the necessary agreement from the Monarch required to make the bill an act of parliament. I guess now they have to figure out what to do instead of a no-deal. Simple, right?
It seems Brexit isn’t going anywhere fast. Minimise its impact on your holiday to the UK by learning how it could affect your travels
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All rates are quoted from the Travel Money Oz website and are valid as of 9 April 2019.