Tag Archives: global trade

AUD Forecast – What are the Factors Driving GBP/AUD Exchange Rates? (Matthew Vassallo)

GBP/AUD rates have dipped slightly during Thursday’s trading, with the AUD continuing to find support around the current levels.

The pair fell to a low of 1.8338, having been trading above 1.84 at its high over night.

The Pound has failed to make any sustained inroads against the AUD since the weekend, after premature talk of a Brexit agreement caused a sharp sell-off of GBP positions on Sunday.

This put the Pound on the back foot when trading lines opened on Monday. It has been a tough week for Sterling, which has seen its value decrease by around three cents, or the equivalent of 3000 AUD on 100k GBP/AUD currency exchange.

I anticipate that the AUD will now find plenty of support again around 1.85, when it seemed as though the Pound was set for a run on 1.90 last week, when a Brexit deal looked imminent.

This is another prime example of how the markets may price in an expected political outcome, only to see the currency in questions value diminish when the expected result does now come to fruition.

Looking at the driving factors behind GBP/AUD and any updates or breakthrough in Brexit talks, will no doubt boost investor confidence and the Pound is likely to benefit as a result. Similarly any talk of a no-deal outcome again and it will likely have the opposite e effect.

Looking at the Australian economy and current slowdown in global trade is certainly having a negative impact. This, along with the current trade war between the US & China is causing investors to shy away from riskier currencies such as the AUD. We generally see commodity-based currencies such as the AUD lose value during times of global economic uncertainty.

If you have an upcoming AUD currency transfer to make, you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.

Our award winning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.

Feel free to email me directly on mtv@currencies.co.uk to find out all the options available to you ahead of your currency transfer.

 

Will Sterling’s Upward Gains be Sustainable? (Matthew Vassallo)

GBP/AUD rates have touched 1.70 again this morning but as of yet, the Pound has not found enough market support to drive it through this level sustainably.

The AUD has lost over five cents against its Sterling counterpart in recent weeks and with 1.70 now a key resistance level on the pair, it will be interesting to see how the market evolves over the coming days and weeks.

Sterling has benefited from the triggering of Article 50 and the removal of an element of uncertainty surrounding the whole saga. It was also boosted, somewhat surprisingly, by UK Prime Minister Theresa May’s political U-turn last week and the snap general election she announced for June. Historically this would put pressure on the currency in question but the positive reaction for GBP, was possibly due to investors pricing the expected outcome and at least another four years of the same government, which brings with it an element of stability.

Another reason we may have seen the AUD’s value decrease is the recent slowdown in the Chinese economy. China as regular readers will know is Australia’s closet ally in terms of trade and despite its ‘cloak & dagger’ style economy, which releases only limited information, there has been a recent slowdown in its imports of Australia’s vast supply of raw materials. With Australia’s mining industry amongst the highest in global labour costs, any slowdown in its exports can have an instant detrimental effect on their economy and ultimately the AUD.

Whilst these figures will fluctuate the recent downturn could be another reason the AUD has lost value of late.

Despite its recent decline, those clients holding Sterling may wish to take advantage of the current spike, especially when you consider reports this week from the IMF, who indicate that the global economy is actually gaining momentum, news which is positive for commodity based currencies like the AUD.

Whilst even medium-term outlooks should be taken with a word of caution, particularly in the current market, any advances for global trade could help the AUD realign its recent losses and any clients looking to buy the currency could see the current market opportunities dissipate.

If you have an upcoming GBP or AUD currency transfer and would like to be kept up to date with all the latest market movements, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact 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.