We have seen Sterling vs the Australian Dollar hit 3 year lows during the course of the week as confidence in the Pound continues to fall. Since the Brexit vote back in June we have seen GBPAUD rates fall from 2 down to as low as 1.58 at one point this week.
More recently UK Prime Minister Theresa May announced that Article 50 will be triggered in March next year and this has also caused the Pound to fall against all major currencies.
Bank of England governor Mark Carney spoke about the Pound’s value and does not appear to be too concerned so I think this could also open the door for another interest rate cut in the UK when the central bank meets in November. Typicallly an interest rate cut causes that currency to devalue so if the Bank of England do intervene I think we could see further losses for the Pound vs the Australian Dollar.
The GBPAUD rate is clearly being influenced by what is happening politically rather than in the economy. The fundamentals for the UK are actually relatively good so if Brexit had not happened Sterling would be much higher vs the Australian Dollar. However, the real issue for the Pound is what will happen during the next few months prior to Article 50 when the official negotiations between the UK and the European Union finally begin.
The uncertainty as to what may happen is causing the Pound to struggle and at the moment I don’t see this picture changing. Therefore, if you’re thinking of buying Australian Dollars over the new few weeks or months it may be worth looking at securing your currency with 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 not only of being able to offer you better exchange rates than using your bank but also help you with the timing of your transfer.
For further information about the options available to you or for a free quote when buying or selling Australian Dollars then contact me directly and I look forward to hearing from you.
Tom Holian [email protected]
Alternatively fill in the form below [contact-form to=’[email protected]’ subject=’Blog ADF 22/10/16′][contact-field label=’Name’ type=’name’ required=’1’/][contact-field label=’Email’ type=’email’ required=’1’/][contact-field label=’Currency Requirement’ type=’textarea’ required=’1’/][/contact-form]