GBP/AUD rates have jumped by over two cents at today’s high, moving the pair back towards 1.70 on the exchange.
This is a key benchmark for many and Sterling has gained market support over the past two weeks, following Donald Trump’s unexpected victory in the US election. Trump’s surprise victory boosted market confidence in the UK economy, due to previous comments the property tycoon made regarding future trade deals with the UK. These comments were made despite our upcoming Brexit from the EU and this allowed the Pound to surge against the major currencies, including the AUD.
Much of the market focus recently has been on the UK economy and whether Article 50 would be triggered in March 2017 as announced by Theresa May recently. With the High Court’s ruling that this decision must be ratified by MP’s and the subsequent appeal by the Government, many analysts will be waiting for Decembers final decision before committing to any long-range forecasts.
However, UK Prime Minister Theresa May spoke today to reassure businesses fearing a sudden change in rules one the UK finally leaves the EU, giving indications that we could be tied to the single market for years to come. This helped to alleviate pressure building on the Pound and Sterling has made gains against all the major currencies, including the AUD.
GBP/AUD rates have improved to some of their best levels in the past 2 months and this positive move has intensified following positive UK Retail Sales figures released last week, which came out well above market expectation. When economic data come outside of the expected remit, we often see aggressive market swings and this can be the time for clients and investors alike to take advantage of an opportunity they did not expect.
However, I would be wary about relying on the current trend continuing into next week, with the Autumn budget being delivered. Philip Hammond could deliver a blow to the Pound, as he is expected to announce that the UK faces a £100bn deficit due to our Brexit over the next 5 years. This news is likely to knock confidence in our fragile economy, so today could be a prime opportunity for those clients holding Sterling.
If you have an upcoming GBP or AUD currency exchange to make and you are concerned by the increased market volatility of late, it may be wise to look at protecting the gains you’ve made, or limiting your losses with one of our forward contracts, rather than gamble on what has become an increasingly volatile and unpredictable market.
If you would like to be kept up to date with all the latest market movements ahead of your currency exchange, 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]