Buying Australian Dollar rates of exchange showed both dramatic downswings and upswings today, leaving most with a GBP/AUD requirement wondering if this is a signal that the downtrend has abated for now?
To answer that question we have to look to what has actually happened today and while it may seem strange we first need to look to events in the USA.
Whether you watched the debate last night, or caught some of the frankly comic highlight reels of the exchanges between Trump and Clinton online, some of the exit polls released show that a slightly more reserved Trump is playing well with the electorate. Even the BBC polls have it as only a 2 point lead for Clinton.
So to sum up the real result from the debates is the realisation to markets on a global scale that we are in for a ‘close race’. Most of the chatter seen on our screens at the office today was centred arrowed the narrowed odds and uncertain expectations for how the election will unfold.
Similar to the General Election in the UK last year in which the polls were close in the run up to the event, though obviously proved spectacularly wrong later, was enough to label the Pound as risky due to the uncertainty of the UK’s economic future. This same temperment is now attached to the Dollar, with concerning consequences for Australian Dollar buyers.
From a currency perspective, traditionally riskier commodity based currencies such as the AUD, CAD, NZD suddenly do not appear as risky a prospect by comparison for investors eager to enjoy interest rates 3 times higher than that of the US on their capital.
The significant capital outflow this morning the Australian Dollar was the overwhelming reason why its value cannonned upwards against its counterparts, including the Pound through increased demand.
The only saving grace for AUD buyers was that at midday a further slide in commodity prices following a poor result at the most recent OPEC meeting allowed the Pound to recover for a minor gain today.
However, this news today about the US election shall continue to be a prevalent factor on the currency markets, and will continue in earnest in October with less than a month then until the election. If you have an AUD buying requirement, with this recent curveball through into the mix, it may be best to look at moving sooner rather than later unless you have a strong reason to expect Clinton to gain a signficant lead in a short period.
That being said, this commodity price news still has not hit whilst Asian markets are open, so this rally could continue in the short-term. As such a premium will be put on the next 48 hours or so to be in a position to move quickly should any tempting opportunites emerge to buy to ensure you are not ‘last to the party’.
If you have an Australian Dollar buying requirement I strongly recommend getting in contact with me overnight or tomorrow morning whilst markets are relatively quieter on [email protected] to discuss the options open to you to maximise your currency return from the upcoming movements, and most importantly to safeguard your purchase from any adverse movements down the line.
Australian Dollar sellers can also get in contact to discuss how best to enjoy any peaks which may emerge during the beginning of October – but I appreciate that some may not be in a position to wait for that period of time.
You can also fill out the form below, and I will be in contact as soon as I am able to.
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