Luckily for Australian Dollar buyers, they did not suffer the same fate as Euro and US Dollar buyers on Friday afternoon.
Speculative trends for profit taking on Friday afternoon has seen the Pound suffer recently, but commodity based currencies such as the Australian Dollar struggle to make the same kind of gains against the Pound as more traditional safe havens such as the US Dollar.
Therefore, the gains made for the Pound last week against the AUD were left largely intact as we entered the weekend. These gains were made despite strong employment figures released on Thursday in Australia, a surprise given the normally quieter winter months on this front.
More than twice the expected number of new jobs were added to the Australian economy last month, but this was totally eclipsed by the first piece of positive news for the UK in some time.
Firstly, inflation at the beginning of the week showed a slight rise after what has been nearly 8 months of decline. The reasoning behind this was shown on Thursday, when retail sales figures for the UK were shown to explode.
A 6% increase reflected complete confidence in spending activity in the UK, and this healthier look as economic activity was reflected in the inflation figures.
After beginning last week moored in the mid 1.6’s, central levels are now back above 1.7. What can we expect moving forward?
With almost no performance information coming out of Australia, GBP/AUD rates will be entirely governed by UK performance information this week.
Data from the UK housing market will begin the week, which is unlikely to cause much of a stir as markets are already aware the situation is relatively shakey. The data would have to come in alarmingly below or above market expectations to cause much difference.
However, Friday should be seen as a red flag for anyone considering buying Australian Dollars, as UK growth and business investment figures will be released.
Growth forecasts have already been downgraded for the UK and expectations for investment are understandably down due to the current limbo established in the post-Brexit vote landscape.
The momentum is with the Pound, but AUD buyers should not expect massive gains this week, and we could see a downturn as early as Tuesday if housing data comes in even lower than expected.
It’s best to be in a position to move quickly in these situations should any tempting opportunities occur. If you have an Australian Dollar buying or selling requirement I recommend contacting me over the weekend whilst markets are closed on [email protected] to discuss a strategy for your transfer in order to maximise your currency return.
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I have never had an issue beating the rates of exchange offered elsewhere, so in addition to help in planning your transfer, a brief conversation could save you thousands on an upcoming move, property purchase, or business invoice.
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