You just cannot take anything for granted on exchange rates!

AUDGBP Lower as Retail Sales Slump Down Under

The Aussie has gone from the being one of the best performing currencies in the last few years to one of the worst in a matter of months. Why is this and is it likely to continue?

GBPAUD – I was in Australia ten years ago when rates were about 2.2. How I wish I had invested every penny I had (which wasn’t much in those days!) and brought it back earlier this year! Throughout the global recession the Aussie continued to outperform expectations as their economy remained largely unaffected by the financial crisis. A weak pound too has ensured GBPAUD hit 1.45 earlier this year, a rate very few would have ever suggested was possible only a few years ago.

I personally feel that the rate will now continue to slowly creep back up towards 1.8, and potentially 1.90 in the coming months. The pound is finally gathering some momentum and I do not believe the Australian economy is over the worst with further rate cuts very much a possibility.

AUDEUR – The Australian dollar is not performing particularly well against the Euro either despite the problems for the Eurozone. Just lately the rate has come back in favour of AUD to Eur transactions but as with the pound versus the Aussie, it looks like the very best days of selling Aussies are now well and truly passed.

If you are selling Australian dollars it is well worth remembering rates were historically much, much worse. According to the very recent growth data the UK and the Eurozone are experiencing some of the biggest improvements in their economies for many years. On the current trajectories it is likely therefore that the Euro and GBP will continue to strengthen against the Australian dollar. 

For a full overview of your particular transaction and to discuss all of your options with a currency specialist please feel free to contact me Jonathan on [email protected]