Will GBPAUD keep rising for now?

Increase in Risk Appetite Helps Support the Australian Dollar

Sterling to Australian dollar exchange rates have risen from the recent lows as sterling finally finds some bounce and investors are reminded that it is not all bad news for the UK. Tata Steel has possibly been saved and David Cameron doesn’t look like he is going to be resigning anytime soon. The prospect of further news on the currency markets moving sterling exchange rates much higher does seem limited since any gains for the pound will be hampered by the political uncertainty up ahead. I think therefore the best strategy for anyone buying Australian dollars is to buy on the spikes in your favour as a sudden sharp return to favour seems in my opinion unlikely. The Australian dollar is being supported by improvements in the Chinese economy and the worst fears not being realised, there has been a real boom in commodity prices and the worst fears over a Chinese economic crisis have so far failed to materialise.

The big news for the Australian dollar this week is the Unemployment news being released this Thursday and then Chinese GDP released on Friday morning. All in all the expectations are for this currency pairing to remain between 1.80 and 1.90, I think if you are looking to buy Australian dollars a rate at the higher end of 1.90 is about as much as you can expect. I would personally expect rates next month of between 1.70 and 1.80 as the full fears of the Brexit become very apparent!

If you have an Australian dollar transaction to consider making plans in advance is sensible to avoid the risk of further unexpected moves making your transaction more expensive. Please email the author Jonathan Watson on jmw@currencies.co.uk to learn more.