As predicted in my previous articles Sterling has continued to fall and has now dropped to below 1.60 for the first time since May 2013 as confidence in the Pound has fallen.
The Pound has dropped against all major currencies recently following the announcement by UK Prime Minister Theresa May that Article 50 will be triggered in March 2017. The uncertainty caused by the vote to leave the European Union has seen Sterling falling by over 40 cents since the Brexit vote and we could see Sterling continue to fall against the Australian Dollar.
French president Francois Hollande spoke out recently saying that European leaders should be firm in their negotiations with the UK and should make things as difficult as possible in order to discourage other nations to think about leaving.
Indeed, Sterling vs the US Dollar is now trading at just above 1.20 on the Interbank level which is seriously concerning for the British economy. With most of our goods coming from overseas effectively the cost has gone up by 20% since the Brexit vote and it is only a matter of time before this is passed on to the British consumer which will have an impact on inflation levels.
The Bank of England governor Mark Carney yesterday said he wasn’t too concerned about foreign exchange and has confirmed that the central bank’s main issue is that of inflation.
Therefore, with their next meeting due to take place in November I think we could see another interest rate cut which is likely to be detrimental to the value of Sterling.
We could see GBPAUD rates go lower as the RBA don’t appear to be looking at cutting rates anytime soon.
If you need to buy Australian Dollars before the end of the year it may be worth looking at buying a forward contract which allows you to fix an exchange rate for a future date.
Having worked in the foreign exchange industry since 2003 I am confident of not only offering you better exchange rates compared to using your bank when buying or selling Australian Dollars but also help you with the timing of your transfer.
If you have a currency transfer to make and want to save money on exchange rates compared to using your own bank then contact me directly for further information or for a free quote and I look forward to hearing from you.
Tom Holian [email protected]
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