GBP/AUD rates continue to float around 1.60 on the exchange, providing AUD sellers with some of the best rates of the past three years.
These levels are a perfect example of how market conditions can shift, which is why those clients holding AUD should be considering their position and looking to protect the huge gains they’ve made over the past six months.
To put this in context clients who are looking to exchange a 200,000 AUD/GBP transfer have made an additional £25,000. Despite GBP/AUD falling lower than this back in 2010, the current levels are almost unprecedented when you consider recent history and as such those clients holding AUD should be protecting the gains they’ve made.
GBP/AUD has always been a more volatile pair than GBP/EUR or GBP/USD and therefore investors will look to make money from the bigger swings we can see on the pair. However, the flip side to this is that the losses can be just as drastic, which mean it is not always easy to predict which way the trend will go, as when it does move it can be aggressive and without warning.
We also need to consider the reserve Bank of Australia’s (RBA) stance, which has always been to try and control the strength of the AUD, for fear of alienating their trade partners and this is another reason I would be wary about assuming the current spike will continue.
Looking ahead and we have some key economic data releases this week to keep an eye on. Tomorrow we have Bank of England (BoE) governor Mark Carney’s speech, which will give us a key insight into our central banks stance on currency economic conditions inside the UK. It should also point towards potential future growth and their current monetary policy stance, so expect additional volatility on GBP/AUD exchange rates during Tuesday’s trading. Then overnight on Tuesday we also have Australian inflation data, which is expected to show a small improvement.
The data doesn’t stop there, as overnight on Wednesday we have the latest import/export figures for Australia, which are always key due to the heavy reliance they have on the export of their raw materials, to China in particular. However, it is Thursday that hold the key with the latest UK Gross Domestic Product (GDP) figures, which is perhaps the month’s key release for investors. This is because it gives us an overview of the current economic climate and will drive the markets and exchange rates alike.
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 [email protected]