The Australian Dollar has once again gained ground against the pound moving nearly 0.3% on the day. This has taken the moves since the start of the year to just short of 1.5%. Much of the moves in my opinion can be attributed to the US Fiscal Cliff agreement breeding confidence to a fragile market and leading to investors seeking currencies offering greater yields. When compared to the pound the AUD offers significantly greater returns (interest rates currently sit 3% compared to 0.5% in the UK) and therefore during increased levels of confidence will often outperform the pound. This trend could well continue in the short term but I feel the Australian Dollar is nearing its peak and I would expect the pound to make a recovery throughout the course of 2013. Long gone are the days of 2.5 but I would not be surprised to see the market levels returning to 1.60 in the coming months. Reasons for this stem from the falling mining sector in Australia, the potential for the Reserve Bank of Australia to cut interest rates in attempt to make Australian exports more favourable, and investor confidence is likely to remain relatively flat with the ongoing troubles in Europe and as the US debt ceiling deadline in February drawing ever closer.
Should you need to buy or sell Australian Dollars in the coming weeks and months I would recommend taking stock of your current position as I believe the market will throw up some excellent opportunities. I would be happy to run through my thoughts on the current market in more detail and can be reached on 01494 787478. Alternatively please email me and I will happily give you a more in depth overview and see how we can help you maximise your exchange by utilising one of the many contract types on offer. Please email Mike at [email protected] to discuss your trade further.