GBP/AUD falls by three cents off the back of strong Australian employment results (Joshua Privett)

Australian Dollar Forecast: AUDGBP gains by 10% since April

GBP/AUD took a further hit overnight thanks to some staggeringly positive employment data released for the Australian economy.

This time of year, with the tourist season beginning to ramp up into full swing, increases in part-time employment were expected and only marginal changes in full-time employment.

Instead the increase in part-time employment more than doubled from what was seen in September. The major story was full-time employment where the loss of 10,000 jobs in September were completely eclipsed with an increase of 40,000 during October alone!

This increased the value of the Australian Dollar as markets showed more confidence in the Australian economy’s capacity to deal with prolonged bouts of low commodity prices on their exports. This is why GBP/AUD fell by 3 cents overnight back to 2.12.

A lot of the weakness that the Australian Dollar endured with the increase in the unemployment rate last month has now been reversed, and the traditional strength for AUD against Sterling during the tourist season will continue to be reflected through employment figures until February/March.

However, in the short-term the head of the Federal Reserve Bank of America, Janet Yellen, will be speaking today.

The Australian Dollar has regularly lost value recently with capital flowing into the US Dollar. Markets have begun pricing in an interest rate hike in the US economy. The interest rate in Australia is relatively good at 2% compared to elsewhere, but a rise in the US is causing some AUD holders to move into the US Dollar with expectations of future gains. The sell-off of AUD causes it to lose value through demand.

Yellen will likely drop further hints of a hike and encourage further AUD sell-offs for the more timid investors who didn’t move earlier. This should provide some short term relief for those with an upcoming GBP/AUD requirement.

I strongly recommend that anyone with Australian Dollars to buy over the next few months should contact me on 01494 787 478 and ask the reception for Joshua. We can discuss a strategy for your transfer to maximise your Australian Dollar return, and I will remind regular readers that these current rates of exchange can be pegged to avoid harmful fluctuations affecting your budget.

Those selling Australian Dollars, depending upon your timescale, can do the same and I can explain how to safely ride favourable movements in your favour in the coming weeks or months. jjp@currencies.co.uk