GBP/AUD has had a slight improvement this morning, but for those buying Australian Dollars, this should be seen as a gift rather than a the beginning of a new trend.
GBP/AUD has always been the most volatile of Sterling’s pairings, with average differences between the high and the low each day measured in whole Cents rather than fractions. The resurgence this morning is characteristic of the fact that even in a falling marking, daily opportunities can present themselves.
Much of the current weakness on buying Australian Dollar rates understandably is coming from the Pound side of the pairing, with the UK deteriorating rapidly in the face of a Brexit. The uncertainty seems set to continue with a prolonged process of naming a new Prime Minister – scheduled for September this year.
A few people reading my posts recently have questioned why the current election seems to have no bearing on Australian Dollar value. To summarize, not only is the UK’s current uncertainty far greater than that of Australia, but because the UK economy is much more dependent on financial services, the current limbo is having an exaggerated effect.
Over the next week, without much political news expected, the two interest rate decisions for both the Australian and UK economies will be the focus for markets. Australia can expect no change after only recently cutting rates, whilst the Governor of the Bank of England – Mark Carney – has been making heavy hints that this will be necessary next Thursday.
An interest rate cut will coincide well with his policy statement on Tuesday to allow banks to lend more to keep the economy functioning and growth protected. As an emergency financial measure, however, this will translate into Pound weakness.
Should the cut take place, with UK interest rates falling further to 0.25%, the disparity between that and Australia’s of 1.75%, will be even more stark. Demand for the Australian Dollar will far outstrip the Pound, and I expect central levels to hit the 1.60’s once more, back to where they were in 2013.
I strongly recommend that anyone with an Australian Dollar buying requirement should contact me on 01494 787 478 and ask the reception team for Joshua to discuss a strategy for your transfer in order to maximise your Australian Dollar return.
I have never had an issue beating the rates of exchange offered elsewhere, and these current buying levels can actually be fixed in place to avoid the likely falls expected between now and the short and medium term – essentially allowing you to pre-book your currency and limit your exposure if you have an upcoming AUD purchase planned.
Australian Dollar sellers can also get in contact to get everything in place to seize any peaks which may emerge in the time between now and making your transfer. A premium in this market will simply be put on being able to move quickly should any opportunities emerge.