We’ve witnessed a lot of volatility on GBP/AUD rates of late and this trend looks set to continue in the short-term. The AUD had started to strengthen and for a time it looked as if the pair were heading back under 1.95. However, the Pound found further support early this week and the trend is once again heading back towards 2 on the exchange.
I do feel we will need to see another shift in market sentiment in order to breach this level but the Pound is gaining support across the board and it will be interesting to note over the coming days and weeks, whether the Australian economic data is strong enough to support the AUD under this level.
The Reserve Bank of Australia (RBA) are reluctant to cut their base rate further at this time, as the fear that artificially trying to drive up house prices could prove detrimental to their economic recovery and therefore it is likely interest rates will be kept on hold for the time being. It is more likely that the recent strong growth forecasts for China will help to support the AUD, due to Australia’s heavy trade links and considering we are still trading very close to a six year high on the pair, I would be tempted to consider my potion around the current levels if I had an upcoming AUD purchase.
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