Will GBPAUD now hit 1.70?

The fall in COVID cases throughout Oz has led to AUDGBP, AUDUSD and AUDEUR rate increasing throughout yesterday’s trading.

Most clients buying Australian dollars are very interested to see the improvements but the real question is what can we expect next? If you are looking to buy the Australian dollar with the pound most clients are now looking at a much improved position with the latest rise in the value of pound and a weaker AUD. The big question is now will it carry on higher and present some fresh opportunities?

Personally I feel sterling is overvalued and we could very soon see the pound start to fall back again in value. The recent move is principally down to Donald Trump getting into power and a perception this will bode well for the UK moving forward. Despite lots of good news on the pound because of this I cannot see any material changes in policy which leads me to think any clients relying on these moves to remain sustainable for the future should proceed with caution.

If you are looking to buy or sell Australian dollars I am of the opinion the pound will come under further pressure in the future and this will greatly weaken the pound making it more expensive to buy Australian dollars. Next week is the latest news from the Autumn Statement by the UK Chancellor which is likely to have an impact on the pound.

Next week we also have a lot of new UK data which I don’t believe will be favourable including UK GDP and government Borrowing figures. I expect attention to return to the UK which will weigh on the pound.

Investors are betting heavily the US will raise their interest rate and this has weakened the Aussie for now. The trend might easily shift to GBP weakness rather than AUD weakness, this market is very tough to accurately predict. If you have a transfer to make please speak to me about all of your options and the best way to protect yourself by emailing jmw@currencies.co.uk

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