A busy week on exchange rates saw the GBPAUD slip below 2 but will this feed into next week? Uncertainty and worry over the outcome of the EU Referendum and imp[roved confidence in the Australian economic region could easily see GBPAUD become much more comfortable below 2 in my opinion. Figures on Unemployment this week did little to spark a major sell off on the Aussie as investors keenly awaited the UK Referendum decision. At the time of writing there is little known about the outcome but I see sterling weakness as the main outcome in this sorry saga as political uncertainty is never good for a currency.
Looking further ahead into the future renewed uncertainty in China could cause a sell off for the Aussie and impact AUD rates. Investors have been keenly waiting for news on any further interest rate cuts down under which to be fair still look likely to come if Unemployment and other key economic indicators fail to impress. As is so often the case on foreign exchange it is not so much which currency is the strongest but which is the least weak. In this instance a much weaker pound would seem to be offsetting any partial weakness form the Aussie dollar.
If you need to buy or sell Australian dollars understanding the market and the outlook plus all of your options is a good idea to avoid increasing your exposure to the market. For a free, no obligation discussion of your situation please email me Jonathan on [email protected]