Daily Archives: January 12, 2017

Selling Australian Dollars ahead of Supreme Court Ruling (James Lovick)

GBP AUD exchange rates are on tenterhooks at present as we all eagerly await the Supreme Court ruling on whether or not UK Prime Minister Theresa May must consult Parliament before invoking Article 50, the formal process to withdraw from the European Union. This topic has been discussed at length on this blog but I cannot emphasise how important the decision is and how much of an impact it will have on the price of sterling.

It has been reported this afternoon that Theresa May will be making a speech surrounding Brexit on Tuesday of next week. This is likely to create volatility and will also fall around the time of the Supreme Court ruling. The Supreme Court normally releases its verdicts on a Wednesday although this is by no means a requirement or guaranteed in any way.

However it would be quite fitting that Theresa May makes a speech next Tuesday with the outcome to follow from the Supreme Court the day after. It is my understanding that the government has requested early viewing of the outcome to put preparations in place in light of the seriousness of this case. Next week looks set to be a rollercoaster for any clients buying or selling Australian dollars and there could be some very good opportunities.

Those clients with a requirement to buy Australian dollars would be wise to get in touch as there is a risk that the pound could fall sharply. The flip side is that if Theresa May loses the appeal the sterling is likely to move higher.

Data is light as we end this week so it will be politics largely driving the markets. Australian home loans, vehicle sales and consumer confidence are all released next week which will give clues as the performance of the Australian economy.

If you would like further information on buying or selling Australian dollars and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk

Buying Australian Dollar rates recovering marginally following yesterday’s slides (Joshua Privett)

Buying Australian Dollar exchange rates this week have been the biggest under-performer in the marketplace, with GBP/AUD exchange rates dripping down below the 1.65 point once more.

This was due to a combination of curve-balls that have left investors and analysts frustrated at the sheer number of variable impacting GBP/AUD rates of exchange.

Markets went into the week anticipating net gains for Sterling. Strong economic performance data was anticipated on Wednesday, which ended up exceeding expectations. Furthermore the expectation of an upcoming Supreme Court ruling favorable for the Pound on the financial markets should have provided a buoyant and supportive platform for Sterling exchange rates this week.

However, two unforeseeable events stole the spotlight.

Firstly Theresa May’s comments on a Sky news interview on Sunday, which the website has documented repeatedly, caused the air of cautious confidence surrounding the Pound to be violently replaced with anxiety. Hints at a harder Brexit were made, and financial markets rarely appreciate hefty changes to the status quo.

Secondly, GBP/AUD fell foul from the most recent scandal to come from President-Elect Trump’s camp. Serious allegations have been made about the campaign’s active association with Russia, and, as such confidence in the Dollar was justifiably shaken.

In these instances, investors seek high short-term returns elsewhere whilst the storm blows over. The high interest on the likes of the Australian Dollar and the New Zealand Dollar are just the ticket and is why GBP/AUD and GBP/NZD have had the most difficult week.

However, the excitement about the upcoming Supreme Court decision is still there…if now a little quieter. 

The lessons from this week for AUD buyers is that unsuspecting news at the moment, with the charged atmosphere in the run up to the triggering of Article 50, can be more hurtful for Sterling than helpful.

As such, expected opportunities should be seized to avoid the increasing risk as we edge closer to March. The Supreme Court ruling could come out any day from now so a premium will be put on being able to move quickly this week to avoid being last to the party on any improvement, which in this currently hypersensitive market may only be around for short while.

You can contact me on jjp@currencies.co.uk or by calling on 01494 787 478 and asking the reception team for me (Josh) to discuss a strategy for your transfer aimed at maximizing your currency return and protecting it from any sudden pitfalls, which can occur in this marketplace with little warning.

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.