Tag Archives: carry traders

Is now the time to sell Austrlian dollars and buy sterling?

Last week the Australian dollar fell to multi year lows against sterling and the US dollar and the economic indicators suggest that further losses are on the horizon for people selling Australian dollars. For people that are researching potential events that will impact the Australian dollar, you should have come across the reasons for why the Australian dollar has been devaluing. The key driver is the strength of the US dollar.

Carry traders which borrow money in low interest rate jurisdictions and invest in high interest rate jurisdictions are not choosing the Australian dollar like they once were because US interest rates are now higher than in Australia and it looks like the gap is set to widen when the US raise interest rates in December.

The other major problem for Australia is that they are stuck in the middle of the trade war between the US and China. Australia heavily relies on China for trade, however Australia also relies heavily on the US for security. At present the trade war between the two leading countries is having a negative impact on the value of the Australian dollar and I expect this trend will continue.

As the UK are now closer to securing a deal with the EU, it looks like GBPAUD exchange rates are heading in one direction and that’s towards 2. For people that are selling Australian dollars to buy sterling you are still generating an additional £15,000 on a 500,000 transfer compared to pre Brexit levels, therefore taken advantage now may pay be your best option.

If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company drl@currencies.co.uk.

 

Will the Pound continue to fall against the Australian Dollar? (Dayle Littlejohn)

Since the beginning of February, week by week the GBPAUD exchange rates have continuously dropped. February 1st GBPAUD was 2.04 and not even two months later rates have dropped 16 cents and finished last weeks trading at 1.88. For clients buying Australian Dollars for properties or business transactions a €400,000 purchase will now cost you £16,000 more today than at the begging of February.

Below is a list of reasons GBPAUD has dropped:

  • The Pound has fallen in value over the last two months due to David Cameron announcing the UK will hold a referendum in regards to EU membership
  • Mayor of London pledged his elegance to the ‘Out’ campaign
  • George Osborne latest budget was heavily scrutinised leading to his own Pension secretary resigning
  • Carry traders have moved their assets away from the Euro due to the terror attacks in Brussel’s and into currencies with high interest rates such as the Australian Dollar.

Its a quiet week for economic data for the Pound and Australian Dollar. A key data release to note is the revised UK GDP numbers Thursday morning. With cuts made to the budget two weeks ago and the UK economy appearing to show cracks I wouldn’t be surprised to see this figure revised down leading to sterling weakness. Further to this the more we hear about a ‘Brexit’ over the upcoming two months, the more pressure the Pound will come under and therefore GBPAUD will continue to slide.

The currency company I work for enables me to achieve clients up to 5% better exchange rates than the high street banks and other brokerages. I specialise in property purchases and sales. Therefore if you are buying or selling a property and want to save money by achieving the best possible exchange rates but also want help in timing your transfer, get in touch by emailing me on drl@currencies.co.uk.

The more information you provide me, the more information I can provide you, I require, your name, brief description of requirement, amounts, your budget, timescales, telephone number and convenient time to call.

PLEASE NOTE DUE TO THE MARKETS BEING CLOSED FOR THE BANK HOLIDAY WEEKEND, I AM OUT OF THE OFFICE UNTIL TUESDAY MORNING. HAVE A GREAT EASTER BREAK AND I LOOK FORWARD TO SPEAKING WITH YOU THEN.