Sterling Australian Dollar exchange rates are currently trading at their lowest level since early last year as global risk appetite has once again grown.
Although the European Central Bank cut interest rates and increased QE this has increased carry trading whereby global investors borrow in low yielding currencies such as the Euro and buy higher yielding currencies such as the Australian Dollar.
This has seen a big strengthening of the AUD vs Sterling providing AUD sellers with even better opportunities in the last few days.
Indeed, last week we saw iron ore prices go up by as much as 19% and as one of Australia’s biggest exports this is good news for the Australian economy.
Consumer spending down under has also increased by 3% recently so things are not looking as bad for the Australian economy as previously expected.
With the Chinese outlook being downgraded to negative by credit ratings agency Moody’s this is likely to cause concern in the longer term for the Australian Dollar as even last year China made up 32% of total merchandise exports.
Therefore, if the Chinese economy struggles this is likely to negatively impact the Australian Dollar in the longer term.
Also, looking at the UK the Pound is continuing to remain under pressure owing to the uncertainty of a possible Brexit. Although I don’t think the UK will look at leaving the EU the uncertainty will cause concerns for anyone holding Sterling.
The RBA meeting minutes are due out on Tuesday and I think that the RBA will confirm they are comfortable with where interest rates are for the time being. This is likely to keep the AUD strong vs Sterling.
Therefore, if you have Australian Dollars to sell it may be worth taking advantage of these recent strong exchange rates vs Sterling.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for a free quote. Tom Holian [email protected]