Daily Archives: October 10, 2017

GBP AUD Exchange Rates Uncertain as Brexit Falters (James Lovick)

GBP AUD is being driven this week by developments in the Brexit negotiations which went into the fifth round of the negotiations this week. The pound has seen a hugely volatile few weeks after the change of stance from the Bank of England where an interest rate is expected in the coming months and the growing uncertainty over Brexit.

There is a 50% chance that the Bank of England will raise interest rates at the November meeting whilst the markets have fully priced in a rate hike by February 2018. A rate hike would be good news for sterling Australian dollar exchange rates but the uncertainly of Brexit is likely to keep the pound under pressure.

Those clients looking to buy Australian dollars with pound would be wise to consider all options as in these markets anything can happen very quickly. The stalemate with Brexit negotiations is something to be very aware of as any speeches from the Prime Minister or other EU leaders can have a direct impact on rates.

Those clients with looking to buy or sell Euros with Australian dollars could see an interesting few days after the Catalonia outcome expected very shortly.

Westpac consumer confidence down under is released overnight and can be seen as a good barometer on the state of the Australian economy and how resilient consumers are. The Reserve Bank of Australia have raised concerns over the strength of the Australian dollar so it may be a matter of time before the conversation moves towards additional stimulus or at least talk of a possible interest rate decrease. This is widely regarded as jawboning and can see the dollar react very quickly.

If you would like further information on sterling or Australian dollar exchange rates or any of the major currencies 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

GBP/AUD Forecast – Political Fears and Uncertain Economies (Matthew Vassallo)

GBP/AUD rates have been floating around 1.70 for some time now, with the Pound struggling to make any significant impact above this threshold.

Sterling’s resent woes have been well documented, with political infighting dividing the ruling Conservative party and a seemingly clueless Brexit strategy increasing pressure on the UK economy.

Whilst UK PM Theresa May struggles against a growing tide of public negativity, any improvement in market perception and ultimately investor confidence, is likely to hinge on a breakthrough in Brexit negotiations.

However, those clients holding AUD need to remain cautious due to a worrying undertone in the Australian economy. Despite the country not entering into a recession in over 26 years, this figure flatters to deceive somewhat.

Reports this week have suggested that the Australian economy is still far too reliant on “houses & holes”.

This references their typical business cycle, where economic prosperity is driven by the export of their vast supply of raw materials. This is mainly iron ore and liquified gasses, which are then shipped to China their main trading partners. At other times low interest rates and easy credit can boost house prices and when you combine this with the highest population growth in the developed world, it can help to prop up headline growth.

This in turn can mask other economic short-comings, in particular a flagging Manufacturing industry. This was once the envy of other nations but aging, high-cost infrastructure has slowed this sector dramatically.

If these economic problems were to manifest themselves, then the current value against Sterling could look extremely attractive in months, or even years to come.

Brexit negotiations remain stagnated and this is helping to inadvertently boost the AUD’s value but were they to take an upward trajectory, the Pound could fine support above 1.70.

If you have an upcoming Sterling or AUD currency exchange to make, then we can help guide you through this turbulent market

Our award-winning exchange rates and 18 years of experience, has helped our clients achieve the most from their currency exchange, regardless of the market conditions.

If you would like a live quote on any exchange, or simply wish to be kept up to date ahead of any currency transfer then feel free to call me on 0044 1494 787 478 and ask one of the team for Matt.

Alternatively, I can be emailed directly on mtv@currencies.co.uk