The AUD has strengthened by over 2 cents against GBP during Friday’s trading, bringing some much needed respite for those clients looking to sell AUD. GBP/AUD rates have moved back towards 2.10 on the exchange, which are some of the best levels we’ve seen in the past 6 months. Whilst I do not expect this trend to drive the AUD down below 2.05, I do feel it will continue to find protection around 2.15.
The AUD has found life tough going for many months, as the dire economic situation in China has unfolded. Due to the heavy trade links between the two economies, any slowdown in China was always likely to have a negative knock on effect in Australia and so it has proved. The AUD has slipped below 2.20 against the Pound during its low point in the summer and whilst I do not expect levels to fall that low again under current conditions, any sustainable improvement down towards 2 looks unlikely in my opinion.
The catalyst for this improvement seemed to stem from the market negativity surrounding yesterday’s poor UK Retail Sales figures. This immediately knocked Sterling’s value and the AUD benefitted from it. As I alluded to in one of my recent posts, I would be seriously considering my position around the current levels if I had AUD position to sell over the coming weeks.
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