When is the Best Time to buy Australian Dollars? (Daniel Johnson)

Could this Key Week for Brexit Negotiations Impact AUDGBP?

This week Glenn Stevens the head of the Reserve Bank of Australia (RBA) had a fairly bullish tone indicating the Australian economy is more stable than first thought. There has been growth in both house building and consumer spending which has caused the Aussie to strengthen over the Pound.

More significant in GBP/AUD value however is the situation in the UK. We have recently witnessed a spate of poor data releases including retail, industrial and manufacturing figures. Not to mention the recent shocking trade deficit figures. The major cause for GBP/AUD though is the EU referendum, FT polls currently show 44% of the UK population wish to remain in the EU, 40% wish to leave and 16% undecided. It is extremely tight and this uncertainty is weighing heavily on Sterling’s value. If the UK were to leave it would be catastrophic for the UK economy, trade relations with  EU members could well become problematic resulting on further strain on our already dwindling exports. Sterling would take a significant fall against the Aussie. Personally I think we will remain in the EU but do not expect a significant Sterling rally of its own accord until after the referendum.

Keep a close eye on China if you have a GBP/AUD requirement, if China change monetary policy in order to stimulate growth expect Australia to follow suit to make their Raw Material export more appealing to the Chinese.

Key Data Releases this week

Thursday 00.30am Australian Unemployment Figures – Unemployment is a key barometer as to the health of an economy so Thursdays announcement could well cause volatility. Although figures are expected to remain unchanged at 5.8% I think they could come in better than expected which could cause Aussie strength.

When should I buy Australian Dollars?

If you are an AUD buyer and have to move short term I don’t have much hope for 2.06 +. As stated unless there is action to combat slowing growth in China I do not expect significant Sterling strength until after the EU referendum. If you are looking to buy Aussie and maximise your trade you will need to move on a Spike. This does take an expert eye to predict and I would advise getting in touch with an experienced broker to assist.

When should I sell Australian Dollars?

If you are an AUD seller, keep a very close eye on Chinese data if there is a significant share sell off or a decline in growth figures get your trade done, you are 20 cents better off than 6 months ago, procrastination could prove costly.

I would be more than happy to assist with your currency requirements and will not only guarantee the best rate of exchange but also help time your trade taking into account your own individual time scale. Recent clients have been extremely happy with my performance of late and I will do my utmost to make sure you feel the same after your trade. If you would like to get in touch for a free, no obligation quote please contact me at [email protected].

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