The pound remains on the back foot against the Australian dollar with rates close to a one month low for this pair. GBP AUD is now sitting at 1.62 and its future direction is less clear.
The pound has been supported against a number of currencies despite approaching the month of March when UK Prime Minister Theresa May has made clear Article 50 will be invoked to give formal notice that Britain will be leaving the European Union.
The Australian dollar however remains in a strong position with the rise in the price of oil and other commodities which is seeing this currency remain buoyant.
Things could be about to change in March though as we approach the next US Fed meeting where there is a strong chance that interest rates will be hiked by 0.25%. An increase from 0.75% to 1% will really highlight that the Fed mean business especially considering that there are likely to be another two hikes later this year. The effect of this is likely to see the Aussie weaken as funds leave the riskier currency and return to the safety of the US dollar where interest rates are going up rather than down.
The month of March looks set to be particularly interesting for GBP AUD with Brexit developments and any changes from the Fed. Those clients looking to buy or sell Australian dollars in these coming weeks would be wise to look for a suitable spike in this volatile period.
UK data is light as we end the week although Purchasing Managers Index data from the manufacturing, construction and services sectors.,
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