GBP/AUD rates will be subject to incredible volatility today (Joshua Privett)

AUDGBP Looks for Gains After Friday Bounce

GBP/AUD exchange rates have already been swinging wildly. As Asian markets opened the release of poor data concerning the price of raw and primary materials in Chinese industry was shown to be falling rapidly, by 5.9% last month alone. With  a significant portion of Australian exports dependent on higher prices in these areas, the Australian Dollar weakened sharply. But only briefly. GBP/AUD reached highs of 2.20.

However, later that same morning Australian employment data came out to halt worsening confidence in the Australian Economy. Unemployment dropped down to 6.2% and 17,000 jobs were added to the economy last month when a mere 5,000 were expected.

This roller coaster resulted in GBP/AUD rates ending up lower than the close of trading yesterday, with GBP/AUD rates now down in the 2.17’s.

I expect this downward trend to continue as capital continues to flow into an incredibly cheap Australian Dollar, international buyers for Australian properties in Sydney and Perth are already up 6.4% and 7.9% respectively in the first 6 months of this year alone. This will drive up the value of the Australian Dollar through demand to help counteract what is likely to be continued Chinese economic weakness.

On the horizon this morning, released at 12:00 BST in a few hours, will be the UK interest rate decision for the Bank of England. This will be where the events of Black Monday cause some Pound weakness to balance out the onslaught of negative news for the Australian Dollar in recent weeks.

The UK was forecasted to raise interest rates by the start of next year. However, following global uncertainty on the massive scale we have experienced recently, this will likely have been pushed back. Last month the minutes from the Bank of England meeting reflected a dovish tone even before the events of Black Monday. The resulting drop in GBP value across the board was staggering. GBP/AUD dropped two cents in the space of 40 minutes.

Should more dovish tones be recorded we could expect further sudden spikes downward below the 2.17 mark. I strongly recommend that anyone with a requirement to buy Australian Dollars to move ahead of this event. There is no evidence that rates will rise off the back of this, they will either hold or fall, which will make waiting either an expensive or fruitless decision.

Contact me on 01494 787 478 and ask for Joshua for a free quote on your transfer and tailored advice on your situation. I guarantee to beat any quote given to you elsewhere to help you maximize your AUD return while rates are still so close to 7 year highs.

Alternatively, those with AUD to sell, email to discuss how to ride this likely surge in your favour, and we can construct a strategy on how to stretch your returns in a down market.