GBP/AUD recovers ahead of inflation data to be released next week (Joshua Privett)

Australia Dollar Lower as Victoria Extends Lockdown

GBP/AUD exchange have corrected slightly following the mammoth gains for the Australian Dollar this week which saw 2.10 broken through easily and a low of 2.08 recorded. At the close of market trading on Friday GBP/AUD has corrected to 2.09 as markets tend to do following such sharp movements.

The reason for the massive fall can mainly be attributed to Glenn Stevens’, the Governor of the Reserve Bank of Australia’s, speech this week which surprised markets by stating the interest rate cut that some were expecting in the Australian economy is now off the table.

After the slowdown in China in August the consensus was that the Australian economy may need to cut interest rates in order to protect the economy from the lack of demand for their exports from the largest trading partner.

Instead the Australian economy has proven itself to be largely resilient. Significant gains have been made in the employment sector, alongside a recovery in their trade figures which have clearly given enough confidence to nullify the necessity of a rate cut.

The reason Stevens can make a long-term statement despite the current uncertainty is that the Australian economy enjoys a strong boost from the tourist industry in their Summer months between November and March – so he is confident of further support through capital influx.

The Australian Dollar strengthened as a result with their attractive 2% interest rate attracting investors ahead of other countries such as the UK who have stagnated at 0.5%, which explains the 3 cent fall on GBP/AUD exchange rates.

Inflation figures for Australia next week should spell further Dollar strength against Sterling on GBP/AUD for the third consecutive month. The UK is currently flirting with negative inflation which accounts for the gains made for the Australian Dollar following this data release in previous months as the figures repeatedly outshine that supplied by the UK.

The hints of a cut were one of the main reasons for the sustained pressure on the Australian Dollar since August. I would not be surprised if the rates currently visible will end up being the best available for buying Dollars for the rest of 2015 and into the first few months of 2016.

I strongly recommend that anyone with a GBP/AUD requirement should contact me on [email protected] to a discuss a strategy for your transfer in order to maximise your Australian Dollar return. To still buy comfortably above 2.0 for GBP/AUD you can fix the current levels of exchange before any of the expected pitfalls affect your exchange.

Anyone hoping to sell Australian Dollars can do the same, and I can explain how to ride any favourable movements to their peak in the time-frame you have to complete your transfer.  01494 787 478