Will the Pound Climb Higher against the Australian Dollar? (James Lovick)

Increase in Risk Appetite Helps Support the Australian Dollar

The pound has seen a good rally over the last four weeks against the Australian dollar which has largely come about by the Trump election victory. In my view this very much opens the door for a trade agreement between Britain and the US whilst also giving other options in the Brexit negotiations which perhaps weren’t available before under the Obama administration. These options for trade probably wouldn’t be around with a Clinton administration either. However the Trump benefits seem to be wearing off for sterling exchange rates and the pound is hitting resistance at these higher levels – Those Brexit jitters are for the moment keeping a lid on the price of sterling.

GBP AUD may have a little further to go through considering the US Federal Reserve raised interest rates by 0.25% last night. This is likely to result in flows of funds returning to the US where interest rates are now higher and the likes of the Aussie and kiwi may reduce in value. The Fed have signalled there may be three rate hikes in 2017 so this is going to become extremely topical.

For this reason those clients needing to sell Australian dollars would be wise to take this into account as the dollar could weaken further. However those client selling Australian dollars could be in luck if the British government should win the appeal surrounding Brexit at the Supreme Court where a verdict is due in January. This in my view would result in  a fairly big fall in the value of the pound presenting another excellent opportunity to sell dollars.

If you have an upcoming currency requirement either buying or selling Australian dollars and 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 James. Alternatively, I can be emailed directly on [email protected]