GBP/AUD rates improve from poor trade data (Joshua Privett)

GBP to AUD Steady as Markets Consider BoE and RBA Rate Cuts

The recent news coming out of China has started to become telling on the Australain economy. The final tallies for December were tallied, and exports were found to have fallen by 5%.

But the results on the markets were subdued – GBP/AUD only rose by 1 cent, and similar gains were seen on EUR/AUD.

There are a couple of reasons for this.

Whilst exports fell the holiday period does tend to slow ouput, you only have to look at the Pound’s slide on the markets in January to notice that some element of this is common-place. So whilst the news is dissapointing, it is not isolated to Australia, nor as serious as it sounds.

The second piece of trade data which showed a fall in trade balance further into negative territory also gives a better understanding towards market mentality.

A negative trade balance shows that a country is importing more than it is exporting. In December, this fell from $-2.5bn to $-3.5bn in a single month.

First of all, it’s healthy that the economy can afford this. But this also highlights that the population in Australia explodes during the tourist season, and further goods are required to be brought in to sustain them. Which is why this piece of data is largely positive as it demonstrates the sheer size of the tourist industry and how it is currently performing.

So a mixed bag for the Australain Dollar overnight, but overall  a negative effect. China is still a pervasive worry, and the real question is whether in March this will translate into the rate cut some are worrying about?

With the current volatility in the markets, it is not uncommon to see a difference between the high and the low each day of up to 4 Cents, so a premium is put on being able to move quickly once a rate you are happy with becomes available.

I strongly recommend that anyone with an Australian Dollar requirement should contact me on +44 1494 787 478 and ask the reception to be put through to Joshua to discuss a strategy for your transfer in order to maximise your Australain Dollar return.

I have never had an issue beating the rates of exchange offered elsewhere, and these current levels can be fixed for a future transfer in order to have certainty about what your purchase may have costed you. jjp@currencies.co.uk