The is the question I am being asked and it is a very valid one. I think it is fair to say that it will happen, but it is going to take a big push and a reversal of the current market sentiments.
If you want to understand what moves the Australian dollar, you need to understand a little about sentiment and how investors view the Australian Dollar. Despite being one of the best performing economies in the last few years the Australian currency is viewed as risky. This is because historically viewed against the pound, dollar, euro and Yen, it was. Not in a sense that it would collapse but in the sense that is was more susceptible to market fluctuations and hence investing in the Aussie by pension funds, hedge funds and banks was ‘riskier’.
Fast forward to 2008 and you can see that as uncertainty rocketed the Aussie weakened but then as it became apparent Australia would be insulated from Western problems and could rely on Chinese demand for their raw materials, the Aussie soared in value. The Aussie has become more and more popular this year as China’s economy has remained bouyant. If you are looking to trade at 1.50 buying Aussie or indeed have targets selling AUD to buy GBP, please contact me on [email protected] and I can watch rates for you.
The Aussie gains against sterling have also of course been aided by the sterling decline of late. Should you be looking to hit 1.50 you will need to see some uncertainty creep into the market as well as the pound find value. Cyprus does create a bit of uncertainty which could lead to an Aussie sell-off but alone it does not represent a significant threat to the global economy. The pound too looks unlikely to find much support so unfortunately the immediate outlook for anyone buying Aussie looks bleak.
Longer term I do expect some moves higher once sterling finds it feet. If you have a currency transaction to consider involving the pound or the Aussie (or indeed any other currency) please don’t hesitate to contact me. I work as a specialist currency broker for a leading UK currency brokerage and can outline possible solutions to any currency transfers which you need to consider at no cost or obligation. Please contact me Jonathan on [email protected] or call 00 44 1494 787 478 for more information.