Daily Archives: March 27, 2018

How high could GBPAUD rates go?

The pound to Australian dollar exchange rates has been touching fresh highs as the pound rises and the Australian dollar weakens. A key factor in this trend has been the shift on the US dollar and the UK with interest rate hikes since both the UK and US are looking to raise interest rates whilst the Australian dollar has been weaker because there are no hikes planned.

This trend seems likely to continue in the weeks ahead as we learn more around the Bank of England who appear very keen to hike interest rates in the future. This will be data dependent but the path ahead is looking clearer which will only help the pound further in the future. The same too is definitely true of the US dollar and the US Federal Reserve who are likely to raise rates up to three more times this year.

As the US interest rate is higher now than the Australian interest rate it makes less sense to hold Australian dollars than US dollars. This has seen a big shift in USDAUD exchange rates which is weighing the Aussie dollar down against the pound and presenting much better opportunities to buy AUD with sterling.

The next really key news is this Thursday with the latest UK GDP (Gross Domestic Product) data which could influence GBPAUD rates. I don’t think this will be a majorly important release but next week could see increased volatility with the latest Australian interest rate decision and important US Non-Farm Payroll data released.

I would not be surprised to GBPAUD pushing higher and we could easily hit 1.90 or the high and mid 1.80’s in April. If you are selling Australian dollars to buy pounds moving sooner than later seems the best bet. Otherwise targetting a more beneficial rate on any spikes might prove a profitable and worthy approach.

If you have any transfer buying or selling Australian dollars then understanding the latest news and trends can help you to maximise your rate by trading at the right time. For more information please speak to me Jonathan Watson by emailing jmw@currencies.co.uk.

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Has GBP AUD Peaked? – Sterling Begins to Fall (James Lovick)

The pound continues to maintain the higher ground against the Australian dollar whilst sterling is falling this morning against most of the other major currencies. Rates for GBP AUD are currently sitting just below 1.84 for the pair but the positive rally appears now to be coming to an end. At present there is an excellent opportunity to buy Australian dollars with pounds and clients may wish to consider securing sooner rather than later to avoid potential disappointment. Sterling Is beginning to fall sharply against most of the other major currencies in a sign of what may now be about to happen against the Australian dollar.

The pound has been given an excellent boost over the last week after Britain and the EU were able to agree on a transitional deal which keeps Britain abiding by EU rules for another 18 months to avoid the so called cliff edge Brexit. This is important for sterling exchange rates as the agreement gives business some certainty which the markets have been screaming out for. This latest Brexit agreement combined with the trade policy adjustments coming out of the Trump administration have helped see the GBP AUD pair soar.

Donald Trump has made two recent interventions where tariffs on Chinese exports have been introduced. The first was the imposition of tariffs on both steel and aluminium and more recently he introduced tariffs on some imported goods. This has wider implications and the Australian dollar is likely to see market volatility on the back of any further policy changes coming from the US.

These changes have wider implications and the Australian dollar is one currency that is disproportionately impacted. The prospect of a trade war has implications for the Aussie especially considering the size of Australia’s export market to China and the fact that China at present is being heavily targeted by the US with these trade barriers.

For more information on Australian dollar exchanges rates and how to try and make the most of any opportunities in the markets then please get in touch with me at jll@currencies.co.uk