GBP/AUD rates of exchange dropped to a 5 month low overnight and almost breaching into 2.07 today as trading opened in the UK markets. There were both long and short-term reasons to account for this fall, both of which suggest that buyers hoping to secure a buying rate comfortably above 2.0 should be looking to move sooner rather than later.
Firstly, Sterling weakened across the board this morning against a host of currency’s, not simply GBP/AUD, with expectations of poor GDP figures to be released tomorrow in the UK.
Last month this data saw GBP/AUD slide by just over 2 cents when the UK’s performance was hampered by a waning construction and manufacturing sector. Analysts are expecting more of the same, and traditionally most Western economies see GDP weakness in November as a result of more conservative consumer habits with many hoping to save before the explosion of buying activity in December. This accounts for why markets began pricing in the falls expected tomorrow, but GBP/AUD managed to recover to the higher end of the 2.08’s by close of play today.
The more long-term and more significant factor for those considering an Australian Dollar purchase in the coming months was a speech given by Glenn Stevens, the Governor of the Reserve Bank of Australia, stating that the previously forecasted interest rate cut for the Australian economy should no longer be necessary.
It seems Australia had weathered the storm of a Chinese slowdown surprisingly well, posting significant employment and trade gains consecutively between October and November. The rate cut most economists were expecting to be necessary has moved from questionable last month, to an unlikely prospect by the end of this one.
The expectation of a cut was one of the main features for why GBP/AUD rose so high in the first place as confidence in the Australian economy, and therefore the Dollar was reduced. Now the pressure on the Aussie has lifted and a more realistic look at the value of the Australian Dollar is represented on GBP/AUD exchange rates.
With Sterling weakness expected tomorrow I strongly recommend that anyone with a GBP/AUD requirement in the coming months should contact me overnight on [email protected] to discuss a strategy for your transfer in order to maximise your Australian Dollar return.
These currently high buying levels can be fixed to avoid the harmful movements which should occur over the next few days and into December as the rally on the Australian Dollar continues. I have also never had an issue beating the rates of exchange offered elsewhere.
Anyone looking to sell AUD can do the same, and we can discuss how to ride further favourable movements to their peak in the time-frame you have to complete your transfer.