AUD at 40 Month High Against GBP – Is it Time to Sell my AUD? (Matthew Vassallo)

Will Sterling Weakness Continue to Help the AUD to GBP Rate Improve?

GBP/AUD rates have slipped below 1.60 on the exchange, providing AUD sellers with some of the best rates they’ve seen in over three years. This has led to many clients looking to protect the gains they’ve made ahead of a key week in terms of economic data releases, for both the UK and Australia.

One of the most important data releases come overnight, in the form of the latest Reserve Bank of Australia (RBA) minutes. These minutes give us a key insight into the central bank’s current thinking, along with indications of future growth forecasts for the Australian economy. This means that any indication of future growth, or a downturn below the current expected levels could have a big impact on AUD exchange rates tomorrow.

Any downturn would inadvertently boost the Pound’s value, despite a lack of confidence in the UK economy and ultimately the Pound. On the flip side a positive outlook would more than likely further boost the AUD’s value and continue the recent trend on the pair, with a move towards 1.55 not out of the question based on Sterling’s recent demise.

We also have a host of inflation data out for the UK tomorrow and with inflation levels a cause of concern for much of the year, this again is going to prove key for investors and the short-term outlook on GBP/AUD exchange rates.

We also need to be aware of the Mid-Year Economic & Fiscal Outlook report overnight on Wednesday, which will once again provide key insights into the current economic climate in Australia. In fact, Thursday morning could prove to offer fantastic buying or selling opportunities with Chinese (Australia’s largest trade partner) releasing their latest Retail Sales and Gross Domestic Product (GDP) figures. These will be followed by the official UK Unemployment rate (expected to remain unchanged at 4.9%), which again is considered one of the month’s key releases by investors.

Further ahead and we have Australia’s Unemployment rate and one of their largest banks’ (NAB) latest business confidence figures on Thursday, along with UK Retail Sales figures.

With so much data and the knock on effect this could have on GBP/AUD rates, I expect increased market volatility and as such if you have an upcoming GBP or AUD currency requirement the current levels are a stark reminder as to how important it is to be kept up to speed with key market movements, ahead of any prospective currency exchange. The currency markets can move aggressively and without prior warning and this is where a proactive broker can help you time your trades and maximise your currency transfers.

If you 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 Matt. Alternatively, I can be emailed directly on mtv@currencies.co.uk