GBP/AUD braces for further drops next week (Joshua Privett)

AUD to GBP Moves Lower from Highs on Virus

Political and economic pressures are set to see a further difficult week for rates to buy Australian Dollars, continuing their gradual slide downwards since the middle of December.

The political pressures on the Pound stem from the recent campaigns for and against Britain’s membership of the EU.

The surprising size of the ‘Leave’ campaign following Cameron’s announcement of an EU Deal being reached was what caused Sterling to have its worst day on the currency markets since 2013. Currency markets rarely react well to potentially substantial changes to a country’s economic situation, as well as the uncertainty which follows.

We’re already seeing similar weakness to the Pound as was seen during the Scottish Referendum, and in this instance, we still have months until the country goes to the Polls.

This weekend the inflammatory rhetoric seemed to hit a new level after the Head of the British Chambers of Commerce was suspended for anti-EU comments. Boris Johnson condemned the move as a scandalous and shameful decision from the agents of ‘project fear’. As a result, when currency markets open once more on Monday, it’s likely some of the more nervous investors will begin to sell off their Sterling assets once more in earnest, lowering the value of the Pound as a result.

Economically, the picture seems just as grey.

The Australian Dollar had a mixed week last week but came out largely unscathed on the currency markets thanks to continued gains seen once more on the commodity markets. This boosts confidence in Australia’s mineral industry to run more sustainable profits.

The Pound isn’t expecting to receive the same lifeline this week. With greater dependence on revenue in our economy from the financial services industry rather than commodities, the multiple and severe slides on global stock markets in recent months are expected to show reduced growth for the second month in a row.

GDP figures, as well as industrial and manufacturing production data sets (consistently poor performers and anchors on the Pounds value since April of last year), are all due out over the first few days of the week.

However, whilst net losses are expected opportunities may still present themselves. GBP/AUD has an average swing on each day of 2-3 cents. So whilst net losses are expected, buying at the right time of the day will have a significant impact on your currency return.

I strongly recommend that anyone with an Australian Dollar buying requirement should contact me on [email protected] whilst markets are closed over the weekend in order to discuss a strategy for your transfer and maximise you AUD return.

I have never had an issue beating the rates of exchange offered elsewhere, and these current buying levels can be fixed in place if you do not require your Australian Dollars until later in the year and are worried about expensive movements on GBP/AUD affecting your transfer in the meantime.

Australian Dollar sellers can also get in contact, and I can explain your options to ride the expected movements in your favour to their peak, in the time period you have to make your transfer. 01494 787 478