GBP/AUD rates have taken a hit during Wednesday’s trading, following the latest Brexit poll. This was released yesterday by the Guardian and indicated that the Leave camp had stormed back into a narrow lead, news which immediately shook the markets and knocked Sterling’s value. Despite the argument that these pre polls hold little weight and do not give us a clear picture of what the majority of the public is actually thinking, it was enough to push Sterling back towards 2 on the exchange.
This key threshold was then broken following the overnight release of the latest Australian Gross Domestic Product (GDP) figures. The official reading of 1.1% growth came in above the expected 0.8% and this helped to drive the pair down to 1.9819 at today’s low. Whilst there are many factors that will influence exchange rates it is the current uncertainty surrounding the UK economy, which seems to be intermittently dragging the Pounds value down. On the flip side you still have the on-going market concern surrounding the demise of the AUD, brought about by a downturn in economic data and poor growth in China, which in turn has caused the Australian export industry to suffer.
What is most poignant top me is that both the BoE & Reserve Bank of Australia (RBA) remain committed to keeping their relevant currencies values in check. This is causing even more problems for investors and analysts trying to forecast trends in the market. It seemed as though the UK economy was being viewed as the lesser of the two evils but after developments overnight we may now find the AUD find support around 2, ahead of a key month for the UK. Any reports of the upcoming referendum vote have the potential to weaken the Pound extremely quickly, so anyone holding AUD may look to take advantage of this unexpected move.
Looking at the key data for the week and those clients holding AUD will be keeping a close eye on Thursday’s trade balance data that may be this week’s key market trigger. The markets are expecting an improvement on last month’s figure and with so much emphasis on this facet of their economy, expect the markets to react accordingly. Personally I would be keen to protect myself ahead of this month’s UK referendum, as I fully expect the Pound to weaken if we do see an OUT vote and I still feel the downside risk outweighs the upside gains.
If you have an upcoming GBP or AUD currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact us on 0044 1494 787 478 and ask one of the team for Matt. Alternatively, I can be emailed directly on [email protected]