GBP/AUD rates have spiked back above 2.14 during Monday’s trading, following losses for the Pound last week. Sterling’s recovery has come in line with a drop off in Chinese economic data and as regular readers will know, any downturn in China with ultimately negatively affect the AUD due to the trade links between the two countries.
Due to Australia’s reliance on the export of their vast supply of raw materials, any dip in this sector invariably hurts the AUD and is one of the main reasons Australia’s economy has stagnated over the past couple of years. Their growth forecast have been regularly cut and with the Reserve Bank of Australia (RBA) remaining steadfast in their commitment to devalue the AUD in order to boost exports, it’s no real surprise to see the AUD’s value drop.
Whilst we have seen some improvement since the summer, the AUD is unable to sustain this and every time it threatens to make a decisive move below 2.10, the Pound finds support and the AUD weakens once again. I do not anticipate this scenario to change before the turn of the year, so any clients selling AUD should look to take advantage of one of these short-term moves, rather than holding out for a dramatic improvement.
Looking ahead and we have some Business Confidence figures released overnight from the National Australia Bank (NAB), which aren’t likely to be overly positive and may cause the AUD to lose value over the coming days. We then have key inflation ata on Wednesday, followed by a host of employment data on Thursday, so expect additional volatility on GBP/AUD exchange rates this week.
If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on [email protected]