The pound continues to fall against the Australian dollar largely on the basis of a perceived worsening outlook for the British economy. Economic data has become much softer of late and the question on everyone’s minds is whether or not the UK will have a technical recession.
The decision by the Bank of England to cut interest rates last week from 0.5% to 0.25% and the resuming of Quantitative Easing saw an instant fall in the price of sterling across all of the major currencies and highlighted that the Bank of England is concerned about the future outlook for Britain. This is all weighing heavy on the pound for the moment making it harder for anyone needing to buy Australian dollars.
Industrial production numbers and manufacturing production numbers released yesterday came in marginally weaker than expected although it was the National Institute for Economic and Social Research numbers which caused a dip in sterling. The GDP forecast that was provided came in lower than expected to just 0.3% and this data is normally considered a good indicator as to what the official numbers will look like.
It hasn’t all been negative though – Official data from the British Retail Consortium showed retails sales in July at their highest for 6 months although this largely went unnoticed.
Selling Australian Dollars?
UK data is light for the rest of the week so we now await inflation numbers for the UK and unemployment data next week. These are what I would call hard data so it will be interesting to see whether these releases show a real negative effect. I’m not quite convinced there will be so soon after Brexit and stable numbers next week could in fact help support the pound.
For anyone selling Australian dollars it would be worth considering moving sooner rather than later. There is currently an excellent opportunity to sell dollars. Brexit should start to fade in the coming weeks and months and the impact will be lessened when this happens which should see the pound turn around at that time.
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]