GBP/AUD When should I perform my trade? (Daniel Johnson)

AUD GBP Mixed as Central Banks Feel the Heat

Brexit the key factor in your trade

Sterling has dropped dramatically in the last twelve months against the Australian Dollar. In September 2015 GBP/AUD sat above 2.20. It now sits at 1.63. The main factor for the fall does not take an economist to work out. Brexit.

The uncertainty surrounding trade negotiations has caused the pound to plummet in value. I feel when there is more certainty after the triggering of Article 50 we will Sterling rally. The pound is currently chronically undervalued. Brexit politics is the key market mover on GBP/AUD, the usual data releases are not having the usual effect. The backbone of the UK economy is strong, in fact growth forecasts are now up to 2% and the doom and gloom predicted pre-referendum is thankfully not as bad as predicted.

If you have to move short term buying the Australian Dollar it is vital to be in touch with an experienced broker to maximise your return. You need someone with their eyes and ears on the market in such volatile times. It is important to have a realistic target rate as I would not expect us to break 1.70 in the next seven to eight weeks. A limit order is a wise choice, it enables the client take advantage should a opportunity present itself outside trading hours. The client would pick a rate they would like to achieve and the order will be purchased automatically when that level becomes available 24hrs a day.

Looking forward, there has been rumour of a rate hike down under which would strengthen the Aussie. I am not so convinced this will occur, I think it may be a move to make the Aussie look more favourable to investors due to US dollar currently being the investors choice with decent returns and a higher element of safety. There is a monetary policy statement on the early hours of Friday which could provide more insight as to monetary policy moving forward and this event has been known to move markets. It is important to realise that Australia may well lose its AAA rating in the coming months. Simply put, If you are selling Australian Dollars I would not procrastinate too long for small gains you are in an incredible position.

If you would like me to assist with your transfer I would be happy to help, I have extensive market knowledge and I will do my utmost to help time your trade and pick the correct contract option to suit your needs. I will also be prepared to provide a comparison against your current provider to demonstrate how much I can save you on your transfer. Drop me an e-mail with a brief outline of your currency requirement and I will endeavour to get back to you as soon as possible. Thank you for reading.

Daniel Johnson

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Executive Dealer – Foreign Currency Direct PLC