The Australian dollar continues to climb higher against the pound although the pace has now begun to slow down slightly.
The Chinese GDP numbers from last week were on the whole better than expected and they mark what may be a flattening of the poor growth that we have seen in China in recent months. If this trend continues with a better outlook in China then the dollar may have a little bit further to go. I personally am doubtful that China is out of the woods yet especially considering all the financial problems seen just a few months ago.
What is most interesting is that the Reserve Bank of Australia (RBA) are quietly concerned about the recent strength of the Australian dollar. Most economies seek a weaker exchange rate to help export markets but in this case the sudden and rapid strength of the dollar will inevitably make things harder for Australian exporters. In my view the dollar will struggle to see further gains beyond these levels in line with global economics. If anything we may see more of the classic jaw-boning from RBA governor Glenn Stevens when he feels such action is required with the desired effect of weakening the Australian dollar. We may not be at that point yet but it is likely to be on the horizon. As such the dollar may strengthen that little bit further although a sharp correction is most likely with a rebound of dollar weakness.
The issues of Brexit and its implications will also have a huge impact on GBP AUD. In fact one of the reasons the pound has fallen so much against the dollar is directly linked to the EU referendum 23rd June as the markets have already begun to price the prospect of Brexit. A vote for Britain to remain in the EU however is likely to see the pound see substantial gains immediately following such an outcome. It adds more fuel to the fire that there is a strong chance GBP AUD should see a correction higher. Sellers may wish to consider taking advantage of the excellent exchange rates for selling Australian dollars as they stand at the moment.
If you have an upcoming AUD currency requirement either buying or selling and would like to be kept up to date with key market movements, or simply wish to compare our award winning exchange rates then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively you can email me directly at [email protected]