Sterling had its worst week against the Australian Dollar for a long time following the disastrous Quarterly Inflation Report which showed a big gap between inflation and wage inflation. Although UK unemployment is now at its lowest level in almost ten years and house prices remain strong there appears to be an imbalance in how many people are in work and how much their real money allows them to spend.
Bank of England governor Mark Carney also said on Thursday following the Quarterly Inflation Report that he would not talk about interest rates which also led to speculation that UK interest rates may not rise as quickly as previously suggested. This saw a big sell off from the Pound and a fall below 1.80 against the AUD which has remained below those levels during Friday’s trading session as well.
I have been predicting that Sterling is too strong at the moment not only against the Australian Dollar but also against other currencies. With the Pound so strong this is likely to have a negative impact on British exports as they are less competitive with a strong Sterling so to me I think it’s a matter of time before the Pound experiences a little fall.
Next week sees the release of UK inflation data on Tuesday and the Bank of England minutes on Wednesday.
Both announcements are due to result in volatility for GBP vs AUD exchange rates so if you are worried about what to do with your currency transfer then contact me directly for a free quote to buy or sell Australian Dollars and I’m confident I can save you money on exchange rates compared to using your bank. Send me an email Tom Holian [email protected]
Prediction this week is for Australian Dollar strength.