UK unemployment and Budget bring some support for the pound. AUD exchange rate forecast (Mike Vaughan)

AUDGBP: Australian Dollar Weakens in Worst COVID-19 Day Yet

On what was billed as being a particularly volatile day with a number of key releases the pound was remained relatively flat against the Australian dollar but has reversed the recent trend slightly with the pound pushing on from the low of 1.8170 to a high of 1.8285. Recently the Australian dollar has found some significant strength rallying from the month low of 1.883, shifting in excess of 3.5% in a little over two weeks. This week the AUD also found further support following the release of the RBA’s latest minutes in which suggestions were made that interest rates will remain at 2.5% for the remainder of the year and that the central bank are becoming more comfortable with the current value of the Aussie. This was to be in contrast to past minutes and lent support to the dollar as a result.

Is this the start of the recovery? For me the rhetoric from the minutes was a little surprising and the pounds softer data sets of late have also caused the pound to show some losses. For me this has been partly caused by the recent adverse weather but I would expect the UK economy to recover from this and begin to post strong results. For this reason I am still confident those buying AUD will see some more value but I would still predict this market volatility to continue. For this reason it is important to put your self in a position to take advantage of a market spike, whether you are buying or selling AUD.

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