Although strengthening against the Euro as well as a number of other majors today, the Pound is once again in negative territory when paired with the Australian Dollar.
There are a number of differing opinions out there regarding the pair, and to make things even more complicated their relationship much depends on decisions made elsewhere in the world.
Since the turn of the year Sterling has fallen over 8%, and at present we’re seeing some of the lowest levels seen in 2016 making now the ideal time to convert Aussie Dollars into Sterling. We’re in this position for a number of reasons which I’ll try to explain briefly in the following paragraphs.
Firstly, commodity prices are in recovery mode, particularly those pertaining to Australia such as Oil and Iron Ore and this has benefited the Australian economy as operating profit levels would have previously taken a hit as commodity prices lost so much value. China picking up steam and attempting to spend it’s way out of recession has benefited the Aussie Dollar due to their close proximity. Cautious comments and a reduction in the planned 4 interest rate hikes to just 2 from the US Fed Reserve has played into the Aussie Dollar’s hands, as investors searching for high returns continue to hold money within Aussie denominated bank accounts and financial products to take advantage of the high interest rates.
The positivity for AUD has coincided with a great deal of uncertainty surrounding the UK as of course the upcoming EU referendum is weighing on the Pound’s value, whilst at the same time all sectors other than the much relied on service sector show signs of contracting. Being such an open economy the UK was already affected more than most by the global slowdown, but the uncertainty surrounding it’s political future has increased the downward pressure on the Pounds value.
Sterling has actually been boosted today as Inflation data has shown a monthly increase from 0.3% to 0.5%, and although GBP rates of exchange have improved generally across the board, even this has done little to help GBPAUD fight against the longer term downward trend.
If you have an upcoming currency requirement involving both GBP and AUD, it may well be worth your time getting in contact with me (Joseph Wright) on [email protected] in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.