It’s been a volatile few weeks for GBP/AUD exchange rates, with the pair hitting a fresh 6 year high last week. However, as often happens when there is an aggressive spike in the market we have seen a realignment, with the pair moving back following market support for the AUD. With the pair still trading above 2 it may be that we have seen Sterling hit a peak and an improvement in Chinese data and growth forecasts last week may have been the catalyst for this spike. The links between China and Australia have been discussed heavily in previous reports but due to their trade links and improvement in China’s economy usually has a positive knock on effect for the AUD.
This spike could continue as we head towards the end of the trading week, with Australian Retail Sales figures release overnight on Thursday expected to show an improvement on previous figures at 0.5%. If this prediction turns out to be correct then it is likely the AUD will gain further support and could make a move back towards 2. Therefore I would not be gambling on such a volatile market and would look to take advantage of current levels whilst they remain above this threshold.
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