The GBP/AUD rate started to drop off towards the end of the week having flurried to 1.74 earlier in the week. Despite the small drop this afternoon it’s the first time Sterling has shown some sustained strength since the Brexit decision.
The UK GDP figures today remained the same from last month and were exactly what the market expected. Considering they weren’t bad I thought this may have had an impact on the market as if they were worse you could have guaranteed Sterling to weaken. Positive data for Sterling will help to emphasise that there is better news to come. The Bank of England in the next few months will have a few opportunities to change the interest rate. Sterling needs good data to avoid a second rate cut this year and assuming we can get to the end of the year without a cut I believe the pound will strengthen.
In the coming weeks the British Government will return and no doubt the UK negotiations out the EU will become the centre of attention once more. There has been much debate over the last week as to when Article 50 will be triggered and until there is a definitive answer from a person of power the debate may continue. Prime Minister Theresa May could provide an answer soon and this could start to settle the market and provide certainty that Sterling needs.
In my opinion if you’re an Australian Dollar seller you should look to capitalise on the low rates caused by Brexit. I think Sterling is unlikely to continue to be weak and will slowly start to gain strength in the short term.
Working for an established brokerage allows me to achieve the best rates of exchange for my clients. I am also able to assist with the timing of a transaction to make sure you get the most for your money. If you would like some information with regards to a currency requirement please email me at [email protected]
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