The Australian dollar has gained momentum against sterling and since the end of May 2016. GBPAUD exchange rates were fluctuating above 2 and throughout the last 9 months GBPAUD has dropped 38 cents and the next milestone would be to break into the 1.50s.
The reason why the Australian dollar has performed so well against sterling is that the Australian dollar has been strengthening and sterling has been devaluing.
Australian interest rates sit at 1.5% and speculative traders leave their assets within the Australian dollar to make a decent amount of interest. We have seen this occur even more in recent months as speculators have sold off US dollars to buy Australian dollars as Donald Trump policies are a risk for speculative traders. In addition Iron Ore a commodity that Australia heavily rely on as an export has been on the charge and is up 50%.
As for the pound, Brexit continues to steal the headlines and this week the House of Lords are set to give their verdict to whether Theresa May can start the process of leaving the EU towards the end of the March. Some Lords have stated they plan to block the Brexit Bill until amendments have been made. For example some of the Lords believe MPs should have a final vote on the deal Theresa May manages to negotiate with EU leaders.
It has been documented last week that the House of Lords could be abolished if they go against Government, therefore I believe they will not rock the boat and they will approve Theresa May’s Brexit plan. Consequently I expect the pound will come under pressure in the weeks to come and a shift into the 1.50s is on the horizon.
For Australian dollar buyers short term, it looks like trading sooner rather than later may be wise!
If you are buying Australian dollars with pounds or selling Australian dollars to buy pounds, it’s worth getting in touch and taking advantage of the service we can offer. It’s my job to keep my clients up to date with regular market information, so they can make informed decision to when to purchase their currency.
In addition we can then provide the client with our award winning exchange rates and they can save money compared to using their own bank or their current provider. If you are planning on making a transfer with your bank in the upcoming months, for example if you purchasing a property in Australia or the UK and need to purchase a currency, it costs you nothing to send me an email with your requirements and I will outline in further detail the process of using our company, how you know your money is safe and the options available to you email@example.com. At that point you can make the decision to whether you wish to use our company.
We have the ability to offer our clients different contract options which will help the clients make as much money as possible. For example limit orders are useful when trying to target a certain rate and forward contracts when you are looking to purchase in the future.
I look forward to speaking with you Monday morning.