GBP/AUD rates have dropped dramatically recently with the pair now trading under 1.64!
The Pound has lost over five cents this week following UK Prime Minister Theresa May’s comments over the weekend regarding Brexit and if this trend continues over the coming days we could see the AUD make a move towards 1.60.
Whilst the Pound is likely to find market support above this level, it is another example of how fragile the UK economy remains in the minds of investors and how the uncertainty surrounding the UK’s exit from the EU is having such a detrimental effect on the Pound’s value.
Theresa May’s interview gave us an insight into the current thinking of the government and whilst many will argue that she is trying to strengthen her negotiating position ahead of the triggering of Article 50 in March, any indication that we are looking at a hard Brexit will only add to investors’ concerns that the UK will find itself out in the cold for years to come.
We need to consider that at present the EU are in control of all our trade agreements and we as an economy have benefited from these. The UK has no real experience of negotiating trade deals and with immigration also a key topic to consider, how will the UK economy fair for the 5-7 years it could take to put these agreements in place?
Whilst the Australian economy is not performing overly well, it has these trade deals in place already and with China a key trade partner and a generally growing economy, they can fall back on these in times of economic hardship.
The Pound did find some support yesterday following comments made by UK Chancellor Philip Hammond, who said that no decision had yet been made and that the UK could remain part of the single market but this to me is the key point, no one actually knows.
We remain in a unique position as no country has left the EU before and therefore investors are having to shoot in the dark and having to account for almost every outcome and therefore we do not have enough information to hand to make a firm decision either way.
With the Supreme Court meeting again today we could get a decision regarding the triggering of Article 50 at any time, so it would be wise for anyone with a Sterling currency requirement to keep in close contact with their personal currency broker, to ensure any opportunities that arise are not missed.
If you have an upcoming GBP or AUD currency exchange to make and you are looking for the best exchange rates available, then please feel free to contact us on 0044 1494 787 478 and ask one of the team for Matt.
We can provide key market information and analysis ahead of any transfer, whilst keeping you up to date with all the latest market movements. We help our client to time their exchange to maximise the market value available and have awards for our exchange rates and service.
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