Australian banks confirm worries, GBPAUD to climb?

AUDGBP: Australian Dollar Weakens in Worst COVID-19 Day Yet

On Monday data released from the Minerals Council of Australia (MCA) revealed that the cost position was falling, i.e. labour costs are growing to one of the highest globally. As regular readers will be aware along with people watching the AUD, their economy is closely linked with the price of raw materials and their mining section as it’s the largest part of their economy. Australia is the resource capital for the fast growing China and far east.  So as this data confirms growing concerns that this sector is under pressure, their economy is expected to slow, the AUD seems less attractive to investors, this lack in demand makes it cheaper for buys.

Following these figures the Australian resource minister stated that the commodity boom is ending – even though this is bad news for the future of the Australian economy it’s not suggesting it will come to a complete stop. I would expect them to continue to export at huge volumes just less than recent times.  We are currently trading near 4 month high buying AUD

So what does this mean for the future of for AUD buyers and AUD sellers?

Well the facts still remain that China is still growing at a HUGE rate compared to the rest of the modern world, well over 7% compared to
near ZERO in the UK. So demand will remain and the future of the AUD is still strong. In the medium term for buyers the hints may have come this week already from the Royal Bank of Australia (RBA), their central bank.  In their most recent minutes they indicated scope for monetary easing. This generally weakens a currency as it creates more money making the amount available all worth slightly less. Now we don’t know exactly what option they will follow, whether it be using the UK method, the US method or the Europeans and this will be key to the future medium term strength of the AUD. For more information about this and long term forecasts feel free to contact us on the normal number or me directly at hse@currencies.co.uk

For short term buyers i.e. over the next fortnight keep an eye out for a few key data released due. These could easily change rates by over 2 cents making a difference of $2,000 for every £100,000 exchanged.

If you need to complete an exchange or would like to make sure you are getting the best price, contact us today. Even to compare your current provider. Either call me on the normal number or email me at hse@currencies.co.uk

Thank you,

Steve Eakins