This Australian Dollar forecast post is slightly later than normal tonight, so my apologies in advance to our regular readers. The reason was due to the release of news at 19:00 GMT on whether the FED would decide to raise interest rates in the US this month.
The main focus of this website is on the traditional GBP/AUD pairing, but this news from the US does have a heavy bearing on the value of the Australian Dollar, and therefore its cost to buy for anyone holding Sterling.
This is centred around interest rates and their impact an investor returns. The Australian Dollar, despite its recent cut, still enjoys and interest rate more than three time higher than that of the US.
The US were set to raise rates four times this year following their raise in December, however, for multiple reasons none of these planned hikes have actually occured. With their election in November, this seemed like the last opportunity for the US to do so at all this year.
They chose not to raise rates, and with investors dissapointed by the lack of returns in a more stable currency, huge volumes of capital have already begun to be moved into the Australian Dollar in the hope of greater returns.
This capital flow and increased demand for the Australian Dollar is making it a more expensive buying prospect for anyone holding Pounds, unfortunately worsening the current loss being faced for anyone with a GBP/AUD requirement caused by the looming Referendum.
Capital flows out of the Pound in the face of a now very real possibility of a Brexit are weakening the Pound whilst the Australian Dollar is strengthening, creating the climate we have seen before for exaggerated losses on GBP/AUD before the weekend. Unless the Remain camp claws back its lost ground over the past two weeks, with this current trend in the market place, it’s likely rates will fall back to where they were in mid-May on GBP/AUD buying rates in the low 1.80’s even preceding the vote next week.
I strongly recommend that anyone with an Australian Dollar buying requirement over the coming days, weeks, or months should consider their options to avoid the risk of essentially what is now the flip of a coin when the UK decides if they are in or out next Thursday.
Current buying rates, still more than 10 cents higher than what was available in May, can be used to pre-book currency for anyone buying Australian Dollars later in the year for just a small deposit. This option is currently more popular than normal for obvious reasons.
Even if you wish to buy Australian Dollars immediately, please note that I have never had an issue beating the rates of exchange offered elsewhere. Whether you wish to pre-book or buy your Australian Dollars immediately, contact me overnight on [email protected].
A brief conversation could save you thousands on your transfer, and even if you simply wish to explore current forecasts on GBP/AUD in more detail, feel free to get in contact.