We have bizarrely gotten used to seen 3 cent differences between the high and the low of GBP/AUD rates of exchange since the beginning of the month.
A number of factors are contributing to this volatility, but one thing is clear is that both Sterling and the Australian Dollar are weakening. Gauging the best timing for your transfer now depends on which one is set to weaken the most.
Initially it seemed that the Australian Dollar itself was on the back-foot with very worrying global news emerging from China at the start of the year. Due to Australia’s reliance on China as a trading partner, regularly in the past poor news in that part of the world has translated into Dollar weakness.
The eventually knock-on effects in the stock-markets, however, which has been headline news daily as panic overwhelms the majority of investors, has now caused similar Sterling weakness due to the UK’s reliance on the financial service industry.
This explains the yo-yo effect and three-cent swings each day on the currency markets.
What will be the decided factor moving forward? Frankly, recent economic performance shows that there is more risk than opportunity in the markets at the moment for those looking to buy Australian Dollars using Sterling.
Australia is enjoying its seasonal strength for the summer months with fantastic employment figures and investment when the tourist season is at its peak (normally this lasts until March).
The UK, by contrast, is still facing an infrastructure bill from the recent flooding being measured in the hundreds of millions, and the dragging effects this has caused on economic activity. For example, last Monday retail sales figures were released for the UK for the month of December – far from the expected gains afforded by the holiday season, growth figures came it at a fifth of what was expected.
Obviously buying activity is being seriously inhibited, and we’re seeing similar results in the industrial and manufacturing sectors. As the flooding has continued into January, when the results for this months output are tallied and released in February, we’ll likely see similar pressure on the Pound’s value persist.
I strongly recommend that anyone with Australian Dollars to buy should contact me on [email protected] to discuss a strategy for your transfer in order to maximise your currency return.
I have never had an issue beating the rates of exchange offered elsewhere and these current levels can be fixed to avoid any harmful movements affecting your transfer.