It’s been a rollercoaster week for GBPAUD exchange rates. Rates have fluctuated over 5 cents and if you had managed to time a purchase of 400K Australian dollars at the right time you could have saved £4,800.
The reasoning for sterling making gains against the Australian Dollar is due to Australian Dollar weakness because of carry trading. A carry trade is where an investor borrows money from a country with a low interest rate (Eurozone) and transfers it to one with a higher interest rate (Australian Dollar) and then makes profit on the interest. Due to the Chinese stock market taking a tumble nearly 2 weeks ago and continuing to devalue we have seen carry trades reversed leading to a mass sell off of AUD which means GBPAUD increases.
The reason for GBPAUD decreasing throughout the week is due to 2 main factors. One, UK Industrial and Manufacturing figures, continued to show a decline and the Manufacturing numbers dropped to a 4-year low. Two, The Bank of England continued to remain dovish in regards to Interest rates and have stated the reason for the pounds weakness in 2016 is the volatility surrounding the upcoming referendum in regards to staying in the Eurozone.
Data releases to look out for this week are:
-Chinese GDP and Retail Sales numbers, Tuesday 2am.
-UK Consumer Price Index (inflation) and Producer Price Index, Tuesday at 9:30am
– Westpac Consumer Confidence, Thursday 11.30pm
-UK Retail Sales numbers Friday at 9:30am.
Again, I expect it to be a rollercoaster week for GBPAUD. If you are buying or selling Australian Dollars this week, month or year I would recommend getting in touch to put a strategy in place to maximise your trade. In order to protect you against market fluctuations we have different contract options available that will meet your needs and requirements. Therefore if you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Dayle Littlejohn [email protected].
If you want further information in regards to a specific currency pair that I have not covered (AUD/USD, AUD/EUR, etc) then feel free to email me with the currency pair and your individual requirement (buying a property abroad, paying a company invoice) and I will personally respond to you with a forecast and the buying process. [email protected] Dayle Littlejohn. Alternatively call 0044 1494 787 478 and ask the reception team to be put through to Dayle Littlejohn.