GBP/AUD rates of exchange corrected upwards slightly to reverse the inroads made by the Australian Dollar against Sterling in the early part of last week.
2.10 was breached comfortably and GBP/AUD rates careered down to 2.08, but the correction re-established 2.09 by close of play on Friday. This was despite some poor UK GDP data released on Friday morning.
Confidence in the Australian economy, and therefore the Australian Dollar, sky-rocketed when Glenn Stevens, the Governor of the Reserve Bank of Australia, removed much of the likelihood for an interest rate cut in the Australian economy in the early part of last week.
Interest rates on the Australian Dollar are currently much higher than other major currencies, for example Sterling is at 0.5% while AUD enjoys a return four-times higher at 2.0%. A rate cut would have lowered the attractiveness of the Australian Dollar and caused its value to plummet.
A cut had been expected following the dramatic events over in China during August, and many were worried the Australian economy would suffer with the reduction in demand for its goods overseas.
However, the Australian economy has weathered the storm surprisingly well. Proving it to be largely resilient to lowered demand in China, with significant recoveries in the employment and trade sectors in October, which nullified the necessity of a cut to protect the Australian economy.
It’s also likely that Stevens could make such a sweeping statement because the Australia consistently enjoys a boost from the tourist industry during their summer months between November and March. The influx of foreign spenders will provide further support for the economy, stopping the necessity of financial intervention in the economy, and allowing further gains for the Australian Dollar against Sterling on GBP/AUD rates of exchange.
Inflation figures will be released on Monday and are set to easily outshine that of the UK’s for the fourth month in a row (not exactly difficult since inflation is currently at its lowest levels on record in the UK economy), and I expect GBP/AUD to drop back down to 2.08 or below on the news.
I strongly recommend that anyone with a GBP/AUD requirement should contact me on firstname.lastname@example.org to discuss a strategy for your transfer and maximise your Australian Dollar return. The expected rate cut which kept rates above 2.10 has been removed, and it would not be a stretch to say the current rates on offer could be the best available for the rest of the year and into the first few months of 2016.
These currently high levels can be fixed if you do not require your AUD until a later date, avoiding gambling on what rate may be available by the time it comes to your purchase.
Any Australian Dollar sellers can also contact me and I can explain the options available to you ride any movements in your favour to their peak within the time period you have to complete your transfer. 0044 1494 787 478