The Australian Dollar has spent an extended period in the 1.80s of late, following what seemed like a short period in the 1.90s en route to 2.0! The primary factors that have provided this window for Australian Dollar sellers are the following; The strong US Dollar, the weak Sterling manufacturing data last week and a huge $1 Trillion Chinese investment in to its infrastructure.
Starting with the US Dollar association to the Australian Dollar, the pair are linked by investors attitude to risk. Investors obviously look to achieve the very best return possible, so the incredibly strong USD is not such an attractive currency – the thought is that there is more opportunity for growth from the weak ‘commodity currencies’ (AUD NZD ZAR).
Sterling lost ground against all currencies last week, as poor manufacturing and services ‘ PMI’ (Purchasing Managers Index) showed that the pounds growth is on weak footing.
Finally, the news reported is of a $1 Trillion Chinese investment in to its infrastructure. This welcome news to Australia could provide an additional boost to the key Iron Ore industry, with the expectation of future steel manufacturing.
If I were holding Australian Dollars I’d look to get exchanged ASAP. I don’t think that this window of opportunity will be open for long, with rates soon heading back towards 2.0. Tied in is the chance that when the RBA (Reserve Bank of Australia) meet in February, a further interest rate cut could be on the cards. This would certainly assist GBP AUD push towards or beyond 2.0!
If you have Australian Dollars and wish to take advantage of the favourable rates, feel free to get in contact to discuss. If you are trying to BUY Australian Dollars and aiming for the best exchange rate, please also get in contact to ensure that you are ready to take advantages of future spikes.
01494 787 478