Is now the time to sell Australian dollars and buy pounds?

In recent weeks the pound has been making gains against the Australian dollar and I expect this trend to continue in the weeks and months to come.

This weeks UK GDP and Average Earnings numbers exceeded expectation which pushed GBPAUD exchange rates back towards 1.77. Over the last 12 months the Bank of England have made it clear that they are concerned with inflation and low average earnings.

Now that average earnings have started to rise and forecasts are suggesting inflation will fall this year due to the boost in the pounds value, futures market are predicting a 50% rate hike in May and a 80% chance of a hike by November by the Bank of England, which should provide further strength for the pound.

Brexit negotiations are also going well for the UK as trade discussions begun this year and in March we will get a full update of how the trade talks are going. It feels that sentiment has also changed as European leaders continue to back the UK. Last week French President Emmanuel Macron announced the UK can have a special trade relationship with the EU and this wee German Chancellor Angela Merkel speaking at the Davos summit gave hope to UK businesses when she explained she wants to keep the UK as close to the EU as possible post Brexit.

So all in all it’s looking promising for the UK and the pound. However this doesn’t look like the case down under. Many of the leading banks including Westpac are forecasters a slow down for the Australia as interest rates will remain on hold and commodity prices will fall throughout the year.

Economic indicators are suggesting that the pound will continue to make inroads against the Austrian dollar therefore Australian dollar sellers buying sterling should look to make a transfer sooner rather than later.

If you are buying or selling Australian dollars in the upcoming months and want to achieve rates of exchange that are better than your bank, whilst receiving regular economic information feel free to email me with the currency pair (AUDGBP, AUDEUR, AUDUSD) the reason for the transfer (company invoice, property purchase) the timescales you are working to and I will respond with my forecast and the process of converting currency. My direct email address is drl@currencies.co.uk and I look forward to receiving your email.

For more news on foreign exchange rates and to request a free no-obligation quote visit www.currencies.co.uk