When should I buy or sell Australian Dollars?

Australian Dollar Looking Bullish

It has been two months since the UK’s surprise decision to leave the EU, and whilst we wait for the official announcement from parliament, we are no closer to an exit now than we were back in June. As a buyer, you’re probably wondering when the next opportunity to buy Aussie Dollars at pre-referendum rates will be. As a seller, you’re hoping for further downturn in the Pound’s value.

Could GBPAUD exchange rates improve this week?

Until Article 50 is invoked and the UK begins its departure from the EU, the UK remains cushioned by time-sensitive negotiations. The UK essentially remains a member of the EU until this begins, but the real challenges for the UK will begin in April/May, which some have speculated will be when Theresa May pulls the trigger on Article 50.

In the short term, any implications of Brexit will unlikely be felt in its projection of economic data, it may be months before the impact hits the economy. I am therefore not expecting current releases to reflect the true nature of the vote.

Friday’s GDP figures for Q2, especially given the strong retail sales for July may provide further Strength for Sterling.

Should I therefore buy Australian Dollars now?

The last time rates were in these ranges was in the latter part of 2013, when we look at the bigger picture, once Article 50 is invoked Sterling will be under enormous pressure as the UK begins its countdown to exiting the EU.

I personally can’t see rates going above 1.75 anytime soon, whilst the UK enjoys the positive releases of economic comfort the harsh reality will soon hit Sterling as we approach 2017.

As a buyer, current levels remain attractive with further slides likely in the months ahead. Just be mindful that once the UK plans a scheduled notice for Article 50 to be used, Sterling will likely fall.

When should I sell Australian Dollars for Sterling

In the short term I see Pound Sterling making further movements against the Aussie Dollar, economic releases will take some time to spill into the economy post-Brexit and this could provide further comfort.

If you need to sell Aussie Dollars in the short term, ahead of Fridays UK GDP figures for Q2 may be worth considering. As mentioned the UK was performing well before the vote and economic releases could highlight this.

However moving further ahead all the signs point to Aussie Dollar strength against Sterling, Pound will likely lose further value once it becomes known as to when Article 50 will be utilised.

There are other factors that could impact GBPAUD exchange rates this year, the US election could benefit the Aussie Dollar as investors look for higher returns on riskier currencies for example. I would drop me an email at [email protected] if you’d like to know more.