Sterling has fallen against the AUD owing to the following reasons (Tom Holian)

Will Sterling Weakness Continue to Help the AUD to GBP Rate Improve?

During 2013 the Australian Dollar fell by as much as 30% against Sterling owing a a number of interest rate cuts and a noticeable slowdown for Chinese growth which had previously hit 10%. The reduced demand for Australian resources over the last 12 months was a huge concern for the Australian mining industry and therefore we saw less money coming into the Australian economy causing the huge weakening.

Since Februrary 2014, the Australian Dollar has hit a period of strength again which first started because of the announcement by the RBA that their interest rate cutting cycle had come to an end. This almost instantly caused the Australian Dollar to strengthen and put a halt to the falls against the Pound.

Recently the Chinese have suggested that more stimulus could come aimed at promoting growth in the world’s second largest economy. If this does take place it’s likely that the Chinese appetite for Australian resources will increase again and we could see further Australian Dollar strength.

Furthermore, RBA Governor Glenn Stevens said last week that the economy is likely to shift towards construction down under and a rebalancing for the Australian economy will take place.

All these reasons are why I think we have seen the Australian Dollar strengthen recently against the Pound but for me personally I think longer term the AUD may fall against the Pound as the UK economy has recently outperformed growth forecasts and with inflation now under control and the jobs market improving this is why I think we’ll see better exchange rates for the Pound against the Australian Dollar in the future.

If you have a currency requirement to make and want to save money on exchange rates compared to using your bank or current fx provider then email me for a free quotation and I look forward to helping you Tom Holian [email protected]