By the end of yesterday’s trading session the GBP to AUD exchange rate was back in positive territory, trading up by over half a percent by the end of the trading day.
The Pound has gained 5% against the Aussie Dollar over the past month, making the conversion of Pounds into Aussie Dollars much more appealing than in recent months after the Pound has been under pressure since the Brexit vote back in June.
Donald Trump’s presidential election victory in the US has worked against the Aussie Dollar for a number of reasons, and since the election results the Pound has gained 10 cents on the Aussie, making a AUD 200,000 purchase £7,500 cheaper.
Moving forward I’m personally expecting commodity based currencies such as the Aussie Dollar to weaken, as now the US Presidential election is out of the way it’s likely that there will be a hike in interest rates in the US, and therefore investors are likely to move funds into the greenback and away from the riskier commodity currencies as investors will be able to achieve a return on their deposits within currencies that are considered more secure.
Despite my prediction of further Aussie weakness as we go into the new year, I think the Pound is also likely to feel the strain as the Brexit process begins. Prior to the UK chancellor of the exchequer, Philip Hammond’s speech yesterday the UK Prime Minister, Theresa May did once again outline her plans to invoke Article 50 next year. Do expect the Pound is react negatively to any talk of a ‘Hard’ or early Brexit.
There were no surprises during yesterday’s Autumn Statement and although the Pound was unmoved during the speech, afterwards the Pound did get a boost across the board.
Interestingly this week, Westpac (a major Australian Bank) have offered price targets on the GBP/AUD pair suggesting there will be another decline for the Pound, with the pair likely to drop to 1.6250 in the short term which is 6 cents lower than its current level.
If you are planning on making a currency exchange between GBP and AUD, it’s worth your time getting in contact with me on [email protected] in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.