Losing almost a full cent during today’s trading, without any poor data or political events in the UK or Australia to explain it, it seems that the recent highs Australian Dollar buyers were enjoying were purely artificial.
The amount of capital flying into the Pound to escape the uncertainty surrounding the Eurozone at the moment is staggering. Sterling has increased in value against all major currencies as a result. However, when such movements are not due to positive economic improvements or due to the opposite in Australia, these can never be sustainable. Essentially these rates are a short-term reflection of market psychology, rather than showing us cold hard facts about the strengths of the relative economies.
Today we have already seen a more consiliatory Greek delegation – offering new terms to bring back some much-needed liquidity to the Greek economy. As such some of the less nervous investors are already returning to Europe, embarassed with their overreaction. This has deflated the value of Sterling across the board today, which is why 2.03 is visable on the markets once again. As we get closer to a resolution, I fully expect the rates to continue in this direction.
Anyone who has an AUD requirement over the next few months should seriously consider their current position. If any solid and long-term agreement is reached with Greece, it is unlikely Sterling will have the momentum to reach this high in GBP/EUR rates again. These rates can be pegged at no additional costs for up to 12 months, so you can budget more effectively and not lose out on these current rates by waiting. Email me on [email protected] overnight for more details.