The 5 year chart for the GBP/AUD currency pairing makes for an interesting observation when you are considering a currency transaction between the pair, as judging the pairs fair value proves difficult.
Those looking to sell Pounds in order to purchase Australian Dollars are likely to be put off by Sterling’s recent drop, as since the ‘Brexit’ and the subsequent Interest Rate cut down to 0.25%, coupled with the Bank of England’s aggressive financial stimulus package we’ve seen around a 30 cent drop which is hard to stomach for those looking at a recent chart.
These sentiments may change once the investor looks into the 5 year historical chart, as over this time the Pound has actually gained 9.89% since August 2011 despite the recent drop, meaning that historically speaking current levels aren’t disastrous.
Moving forward I do think that there could be further for the Pound to fall, as economic updates outlining the performance of the UK in it’s post-brexit stage may disappoint and I expect markets to react overly negatively to these kinds of updates.
Aussie Dollar sellers looking to buy Pounds on the other hand have perhaps a harder decision to make. Recently the rate has moved in your favour very substantially, and it would be disappointing to miss these current levels although there could be the potential for further falls.
This is where staggering your entry level by breaking the amount up into tranches can work to your advantage, as you can hopefully average up over time and eventually end up with a higher than originally planned average entry level. This method, whilst not costing anymore carries an element of risk as these favourable levels may not be available for much longer, but it has worked for a number of my clients and I’ll be happy to discuss it with you if you have trade to make.
Feel free to contact me (Joe) if you wish to discuss an upcoming currency exchange you need to make. You can contact me on 01494 787 478 or on [email protected] in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages.