Pound to Australian Dollar improves despite IMF downgrade, is this a sign that the Pound is oversold? (Joseph Wright)

I wrote last week about how some analysts as well as members of the Reserve Bank of Australia are becoming concerned that the Aussie Dollar is becoming overvalued and higher than it perhaps should be, and I believe we will continue to hear similar commentary in the upcoming months.

Earlier in the year the Pound to Aussie rate hit the mid 1.70’s whereas the pair are now trading closer to 1.50 than 1.60. Since the Brexit the lowest the pair have fallen to is to a mid-market level of 1.59 so i don’t think we can rule out another move to these low levels as we don’t require the GBP/AUD pair to do something they haven’t in recent history.

In the early hours of this morning the Pound started off on the back foot after the International Monetary Fund (IMF) downgraded both the UK and the US growth forecasts for the rest of this year.

Throughout the day though the Pound has climbed, not just against the Aussie but across the board as the Pound as gained against all major currency pairs today.

Despite this boost I think that we could see the Pound trade at lower levels, especially if the UK inflation rate continues to under-perform and the likelihood of a rate hike from the Bank of England continues to dwindle.

If you have a currency exchange to carry out in the coming days, weeks or months then you are more than welcome to speak with me directly as I will be more than happy to help you both with trying to time a transaction and getting you the top market rate when you do come to buy your currency. A small improvement in a rate of exchange can make a huge difference so for the sake of taking two minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can email me (Joseph Wright) on jxw@currencies.co.uk and I will endeavour to get back to you as soon as I can.

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