Where now for the aussie?

The fall in COVID cases throughout Oz has led to AUDGBP, AUDUSD and AUDEUR rate increasing throughout yesterday’s trading.

GBPAUD has climbed significantly in the last few weeks, most expectations seem to favour a continued improvement although anyone watching the rates closely will have noticed we are some 7 cents below the highs we saw last week. Why is this? Well last week it looked likely the UK were going to be raising interest rates soon and there was an expectation the RBA (Reserve Bank of Australia) would cut rates. In fact this week we saw the RBA keep rates on hold and the UK confirm any rate rise was much further ahead.

This has caused the Pound to weaken against the Aussie which I think is presenting a very good opportunity to buy sterling with Aussies. I strongly feel the longer term forecast favours sterling because the UK economic situation is ripe for an interest rate hike at some point. In most cases I would expect the RBA to at least consider cutting rates in the future as most expectations focus on a weaker economy in the future for Australia due to a deterioration in commodity prices.

All in all the Aussie has struggled in 2015 and I expect this to continue. For more information at no cost or obligation please contact me on jmw@currencies.co.uk