Sterling Showing Signs of Life Ahead of “Super Thursday” (Matthew Vassallo)

Will AUD to USD Retest the All-Time Lows?

Sterling has shown signs of life this week, ahead of key day tomorrow for the UK being dubbed “Super Thursday” by investors. The Pound has made some gains against the major currencies and whilst we’ve seen a slight dip against the AUD, the general trend over the past couple of days has been positive for those clients holding Sterling.

GBP/AUD rates are once again floating around 2.04, having dropped perilously close to the 2 level last week. This was reassuring as it represents a key resistance level, which if broken, could have meant further losses for the Pound over the coming weeks. However, despite this realignment I am not expecting GBP/AUD to spike aggressively under the current conditions and if 2.05 were to become available again, I would be very tempted to secure any short-term positions. The on-going problems in China are certainly a negative for the Australian economy due to their trade links but this has now been factored into the current exchange rates, so any improvement there would likely boost the AUD.

Looking at the UK and we have certainly seen a downturn since the turn of the year, due to a poor run of data and a change in market perception. The Bank of England (BoE) now seem to have changed their stance and are keen to see the Pound lose value to boost our own trade links with the Eurozone and beyond. With current inflation levels a cause for concern I do not anticipate an interest rate hike anytime soon, news which has also softened market support for the Pound.

Tomorrow we have some key data release for the UK and I’m expecting a much clearer outlook for the short-term movement on Sterling rates following these. We have the latest BoE interest rate decision and subsequent monetary policy statement, along with their Quarterly inflation report. We also have the BoE minutes, which should give us a key insight into the current thinking of our central bank, regarding the current economic climate and future monetary policy stances for the UK.

If you have an upcoming currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me on 01494 725 353 and ask one of the reception team for Matt. Alternatively, I can be emailed directly on [email protected]