The pound has seen excellent gains against the Australian dollar today which is welcome news for anyone buying Australian dollars. Rates have climbed by over 1% for GBP AUD and this is not a sterling story. The Australian dollar has weakened largely as a result of comments from US Federal Reserve’s Dennis Lockhart comments who suggested that a US rate hike in his view was on the horizon later this year.
The Australian dollar is heavily impacted by economic events in the US and particularly by changes in interest rates. If there is to be an interest rate cut in the US by the end of the year then there is likely to be a weakening in the Aussie as funds are pulled back from Australia and into the safe haven of the US dollar.
There are three more US Fed meetings this year. My view is that the September meeting will be too soon for the Fed to hike and that there will be no change at the November meeting just one week before the US presidential election. That then leaves us with December if the Fed is going to hike. The US Fed minutes this evening should give more clues and they could outline the path more clearly. Anyone selling Australian dollars would be wise to consider moving at this point and take advantage of what is close to a three year high for converting from AUD into GBP.
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 me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]