Repeat weekend dip on buying Australian Dollar rates contrasts expectations for GBP/AUD rise next week (Joshua Privett)

Will AUD to USD Retest the All-Time Lows?

Australian Dollar buyers have seen a frustrating and unavoidable repetition when it comes to Friday afternoons and the undermining effects this has on Sterling’s value.

Each Friday speculators at high street institutions must choose a stable currency with which to store their profits in for the weekend when they are not at their desks to manage their exposure.

The recent leave vote has meant that the Pound is not high on the list of stable currencies with which to store such profits. The sudden loss of demand for Sterling on Friday afternoon saw the characteristic dip on GBP/AUD to knock on the door of 1.74 once more after hitting 1.76 earlier in the afternoon.

However, expectations are still healthy for the Pound next week, to the benefit of Australian Dollar buyers.

Firstly, the characteristic losses on GBP/AUD are normally recouperated in some form of another by Monday morning. Markets re-open to normal activity, and the readily available supply of suddenly cheaper Pounds are eaten up and its value rises with its renewed demand.

Secondly, Tuesday is expected to bring some positive news for the UK with the second succesive month of improved inflation expectations after almost 15 months of consecutively concerning news. This is attributed to the benefits of the holiday season, a cheaper Pound, and a slight rise in oil prices.

Thursday may also show an improvement with the BOE press conference with Australian Dollar buyers hoping that Mark Carney, the Governor the Bank of England, repeats the positive sentiments about the UK economy which he mentionned during last weeks deposition made to the UK Parliament.

However, nothing is guaranteed. The wildcard this week will be Wednesday with UK employment data, the first real look at how net employment has changed since the leave vote. Whilst the number of employed is expected to rise, it is not expected to be dramatic – again lending to the narrative that it is not all doom and gloom post-Brexit. The unknown factor is that we could be surprised with these forecasts.

The positive feature for AUD buyers is that there is little data coming out from Australia this week, meaning that the narrative on GBP/AUD won’t be challenged by much positive news which is easy to find currently from the Australian economy.

But with a plethora of data coming out from the UK side this week there is potential for surprises. If you have a planned Australian Dollar purchase and you want to take advantage of the expected movements this week, I recommend contacting me over the weekend whilst markets are closed on jjp@currencies.co.uk to have a discussion about the options open to you in order to approach this volatile market safely with the aim of maximising your currency return.

AUD sellers may wish to move with immediacy as markets open on Monday morning, and you can contact me via email or with the form below. I have never had an issue beating the rates of exchange offered elsewhere so a brief conversation could save you thousands on an upcoming transfer.

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