Australian Dollar Weakness (Tom Holian)

AUDGBP Tests 0.5600 Once More as BoE Cuts QE

With the US economy now improving as measured on Friday’s GDP figures which saw a growth during the last quarter of over 4% this has had a huge knock on effect on more risky currencies including the AUD, NZD & ZAR. Focusing on the Australian Dollar this year we have seen a 45 cent movement or the staggering difference of AUD90,000 on a £200,000 currency transfer. Prior to 2013 global investors had been looking to purchase the Aussie Dollar using the principle of carry trading (borrowing in a low yield currency for a higher interest rate return). In the last two years the Reserve Bank of Australia has cut interest rates 8 times with more possible going into 2014.

I think we’ll see a weakening of the Aussie Dollar going into the first quarter of next year owing to the Chinese economy also slowing. The imbalance between the mining industry down under and the rest of the economy, means that the RBA may have to intervene to artificially weaken the currency.

I would anticipate Sterling continuing to strengthen against the Australian Dollar over the festive period so if you want to take advantage of exchange rates or compared them against your current fx provider then email me directly for a free quote Tom Holian Email directly [email protected]