GBPAUD rates have dropped further this week following the Reserve bank of Australian Policy change which has been well documented. The reason for the change through yesterday’s trading day was as the Housing market data from Australia showed a surprising improvement in an area of the economy Australia has historically been struggling. This pushed up the value of thee AUD making it more expensive to buy by almost a cent.
Many clients are contacting us at the moment with the question; will rates go back up to 1.90? will GBPAUD start strengthening again?
It is a fair question to ask after seeing GBPAUD rates dropping by over 8 cents within 2 weeks, a drop of 5% losing over $15,000 on a £200,000 purchase. My view is that today will be key in the short term but thereafter rates will probably return back in the favour of Sterling. Today’s Quarterly Inflation Report from the UK due in 2 hours is probably the largest report from the UK economy this month. In it it will report on the UK economic performance last year and update their forecasts for both 2014 & 2015. This is widely expected to show an improvement and therefore Sterling’s value could climb. The other argument is that it will also be the time that the Bank of England update their “forward Guidance” policy and when the bank aims at raising interest rates. This is expected to be pushed back and could therefore weaken the value of the Pound.
In either case no one seems to be expecting a quiet day for the GBPAUD rates, as a result today could see rates change by hugely– a scary and costly error may therefore follow for people with a currency requirement. So if you are in the market and would like live updates and SPIKE NOTIFICATIONS please register your interest by calling +0044 (0)1494 787 478 or emailing myself STEVE EAKINS at [email protected] with your situation and contact details, (phone numbers will have priority over just an email address to reply to.)
My view is that we are more likely to see rates drop and for us to see Sterling’s value fall rather than climb but as always I wish I had a crystal ball.
Longer term I still see the UK economy continuing in its faster gear recovering from the recessions seen in recent years. As a result I think GBPAUD rates will continue to climb once more however at a much slower rate than we have previously agreed. We can however see that rates do not move in a straight line and therefore there will be better opportunities than others for both buyers and sellers. Meaning timing a trade is still key in achieving the best price. Here we help with this, keeping our clients informed of market movements so that they can make an informed decision. If this sounds like a service of interest please feel free to get in contact, my name is Steve Eakins and you can email me at [email protected] or call on the normal number.