Daily Archives: December 16, 2016

Buying Australian Dollars improve ahead of thin Christmas trading to begin next week (Joshua Privett)

Buying Australian Dollar rates have shown a marked improvement ahead of the Christmas period with the ‘magic’ level of 1.70 being broken for the second time since the absolute lows of October.

The gains against the Australian Dollar this week were due to a lower demand for AUD which sucked away some of its recent, and frankly over-inflated, value. The reason behind the rise is attributed to the historic rise in interest rates in the US, only its second time the FED have been do so since the financial crisis.

The interest rate on the Australian Dollar is at record lows but still much higher than elsewhere at 1.5%, compared to the UK’s at 0.25% for example. However, it is traditionally seen as an unstable currency, so when you have a safe-haven currency which raises its base rate, investors like to opt for this safer option, and the sell-off of Aussies for US Dollars is why USD/AUD gained today, as well as GBP/AUD.

Moving forward however, Australian Dollar buyers have the phenomenon of profit taking to deal with as unusual end of year market forces take hold of exchange rates over the next few weeks.

At the end of the year traders and companies wind down their positions in order to consolidate their profits in a stable currency to avoid coming back to their desks in January and finding outside forces have eaten away some of its value. Of course the Pound is seen as anything but stable at the moment.

As such anyone with a buying Australian Dollar requirement may be wise to move sooner rather than later to avoid the hefty amount of risk which should be piled onto Sterling in the very near term.

Since Trump became President in November, AUD buyers have gained over 10 cents in the marketplace. Meaning that on a £100,000 transfer you have gained an additional $10,000 in the space of 6 weeks. Understandably, the popular option at the moment is to consolidate those gains.

The turn of the New Year has many forks in the UK and therefore the Pound between January and March which are difficult to account for ahead of time, and markets will be factoring this in to the price of Sterling moving forward.

Sterling buyers of course may consider the opposite and play the currency markets by ear as we edge closer to the Christmas period to try at catch the market at any peaks which emerge.

If you are planning to make a currency exchange involving the Pound and another foreign currency, it’s well be worth your time getting in contact with me on jjp@currencies.co.uk over the weekend in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages.

I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you thousands on a prospective transfer.

What will be the big news on GBPAUD exchange rates?

GBPAUD exchange rates have improved as the pound finds favour on the back of an improved outlook for sterling exchange rates and the UK economy. Most analysts now expect the pound to be stronger in the coming weeks and months as investors look to invest their money in a much more stable and potentially profitable currency and country. Most suggestions indicate the UK will no longer be engaging in a hard Brexit which would see the UK sever all ties with the EU including access to the single market. This has helped the pound rise but is it guaranteed?

If you have any currency requirements to buy Australian dollars then you might find it could become more expensive in the future if the Supreme Court decision throws out the government’s case that they will be able to enact Article 50 under Royal Prerogative powers. If the government is allowed to act without parliamentary approval the pound could end up much lower. If the case is upheld then the pound could rise higher but I do feel much of the good news is already priced in.

GBPAUD rates have fallen dramatically but just lately we have had an excellent improvement of almost ten cents presenting some of the best levels to buy the Australian currency in almost 2 months. If you are looking to make any GBPAUD currency transactions in the coming weeks and months then please speak to me Jonathan about the latest news and trends to be kept up to date. For more information please email me Jonathan on jmw@currencies.co.uk