In recent weeks the GBP-AUD currency pair has been particularly volatile, and expected to continue so this week. Potentially however, rates could swing by an even larger amount. This in turn makes moving quickly the key to achieving the best rates, when trading Sterling / Australian Dollar. If you are in this situation, make sure you are keeping a regular and constant watch of the markets, or have a broker providing that service for you. If you can’t or don’t have that facility, feel free to contact us here. We offer rate alerts, limit orders and stop loss orders, allowing you to limit your exposure to the market movements. The difference between costing you more or achieving your targets!
What Will Drive GBPAUD Rates?
Tuesday and Wednesday are big days for the Pound. the general view is that the Pound will strengthen on Tuesday and weaken on Wednesday. Both Consumer Price index and Production Price index are expected to show an improvement on Tuesday – hence the view that this may be the best time to sell the pound this week. On Wednesday, (probably be the biggest day this week), the Bank of England minutes are released. This will let us know more about the thoughts of the head of the Bank of England, with regards to potentially more QE (Quantitative Easing) coming. If Mr Carney voted for further QE two weeks ago, it puts the vote at 5/4, extremely close to a majority. This means he thinks the UK economy is weak, and that he will put more money into the system. This could weaken the pound SIGNIFICANTLY, by upwards of 1.5 cents I would imagine, therefore adding £1,000 on a AUD $200,000 purchase.
Today we have the equivalent release from the Reserve bank of Australia, which will also be keenly watched by the market. Any signs of change to policy, or information linked to another interest rate change during the build-up to the Australian elections, could be big news. The consensus is that another drop in rates is due within the next 6 weeks, which would weaken the AUD making it more expensive to buy.
It all points towards a strategy for GBP-AUD sellers to trade on Tuesday and buyers to hold out for Wednesday – That is my view when trying to see through the murky crystal ball of the GBP-AUD pair.
If you are looking to trade the Australian dollar and want to know how this could affect your situation, feel free to get in contact. Email me directly at [email protected] for a personal email or call back to go through your options.