Data releases are very thin on the ground for both the UK and Australia for the remainder of the week so usually I would not expect any significant volatility. However, following last weeks “Flash Crash” and the perilous situation Sterling finds itself in I would not rule out further falls for the pound. Now it seems that a hard Brexit is a necessity following Jean Claude Junker and Francois Hollande stating there would be no trade negotiations until Article 50 is triggered. This does not bode well for trade negotiations and it is this uncertainty that will mean Sterling will have a very difficult time having a significant rally against the Aussie.
I do feel the pound is chronically undervalued, but it will take decisive action in trade negotiations in order for Sterling to recover. Theresa May has publicly stated Article 50 will be invoked by the end of March. Once it is triggered expect an initial fall the pound and then I predict we will see a slow but steady pound recovery.
Australian dollar strength is currently causing the Reserve Bank of Australia (RBA) problems. With Aussie value so high, Australia’s raw materials are becoming less attractive to the Chinese. So there is a possibility of a rate cut from the RBA in an attempt to weaken the Aussie. It should be noted that the last cut in August did not have the desired effect.
All in all if you have GBP/AUD trade to perform short term it is vital to be up to date with the most recent market movements and contract options available. I would strongly suggest getting in touch with me to assist with your trade, timing your trade is key to maximising your return and I am watching the markets for up to 10hrs a day. I can also offer trading options to protect you in case of adverse market movement as we saw during the “Flash Crash” last Thursday. Please do get in touch if you would like my assistance, there is no obligation to trade with us by doing so and we could save you up to 4% compared to your high street bank. Fee free to e-mail me at [email protected]. Thank you for reading my blog.