GBPAUD rates heading to 1.90?
The Australian Dollar rates has seen some considerable movement over this week with a ‘free fall’ seen in its value. Buying the Australian Dollar with GBP has become considerably more expensive and this is down to a number of reasons:
- Firstly global risk appetite has changed and with interest rates going to stay low globally the incentive to buy in Australia or indeed invest is growing. This additional demand for the Australian dollar is giving it further value and making it more expensive to buy. This we expect to continue as commodity prices remain so low which in turn is impacting inflation globally.
- UK economy is falling, not to a point of worry in comparison to other countries but it is certainly slowing at a faster pace than many as a result of its dependency on finical services. Plus add into that the uncertainty for the future of the UK with the debate on the BREXIT is weakening the demand for investment in the pound along with both internal and international investment dropping. This is resulting in the UK pound becoming less value and weakening against most major currencies.
- Lastly – the Australian economy. Even though they too are slowing, it is at a slower pace than many expected. The Central Bank in Australia has been hinting at intervening by changing policy but this has been pushed back, investment has returned and therefore its value has been climbing
Generally speaking I see this continue, there is so much little levels of resistance in the market the free fall we are seeing in value I can see continuing.
Only today we saw the latest inflation report from the UK which again showed a weakening, hence the further cost in buying Australian Dollars today.
Next week we have more economic data due and it does seem that rates are only heading in one direction.
If you have Australian Dollars to buy, any SPIKES up should be seen as just that, a short term opportunity.
To discuss the market in more details, live prices or indeed forecasts please feel free to contact myself STEVE EAKINS via [email protected] or by calling 0044 1494 725 353