The Australian dollar has continued to slide further taking the Aussie down to a 3 month low. At present this is a story of both dollar weakness and sterling strength as far as GBP AUD is concerned. It has certainly presented anyone buying Australian dollars with an excellent opportunity whereas anyone selling Australian dollars will be very much feeling the pinch in a big way.
The dollar has continued to weaken since that interest rate cut from the Reserve Bank of Australia (RBA) at the start of the month and has not recovered to date. The problem lies in the view that another rate cut is expected from the RBA at some point in the future which is putting even more pressure on the dollar. RBA governor Glenn Stevens is not even having to jawbone the currency for it to weaken, it is doing that by itself.
There has been of late a gradual climb in the price of oil which should in theory help the Aussie going forward although it remains in question whether the price of oil will in fact continue to rise. Some of the rise in the price of oil has been as a result of recent supply issues from countries including Canada, where production was halted after the Alberta wildfires. As such the rise to date may not be sustainable and hence the dollar may tumble that bit further if oil prices slide again. I feel however the dollar should be bottoming out about here having seen a sizeable move higher above $2 for GBP AUD.
The two most recent polls from Britain have put the Remain campaign in front by some way and this has resulted in a sudden rise in the price of the pound against all of the major currencies. I would remind anyone with a currency requirement that it is still a long way to go before 23rd June with another month to go of fierce campaigning. The gloves may already be off but with one full month to go I feel it is too early to be putting down favourites. Expect major fireworks for sterling exchange rates as we approach the date!
There are a number of data releases for Australia next week although Australian GDP numbers are likely to take centre stage. Any upturn here should see the dollar rally and find a new level of support away for its recent lows.
If you have an upcoming GBP or 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]