The Australian dollar has seen a wobble this week after concerns over the strong housing market have materialised. The minutes from the Reserve Bank of Australia’s last meeting gave warning to risks associated with the housing market.
It is often the case that the construction sector and housing markets are normally the first to suddenly fall in uncertain times and at the start of a recession for example so the central bank is simply picking up on the risks associated with this. It is a small concern considering the Australian economy has continued to perform well without a recession for the last 25 plus years but it still had the effect of weakening the dollar.
Meanwhile for GBP AUD it will be an eventful couple of weeks with the announcement that Article 50 to be formally invoked on Wednesday 29th March. This has the potential to create considerable market volatility and I am of the opinion that the pound may see some positive market movement at that time or even a day or so after. Those clients looking to buy Australian dollars may be presented with a short term window of opportunity.
Those clients with pressing requirements would be wise to set things up in place ready if there is substantial volatility.
As I have stated before, no country has ever left the European Union before so the decision really does have the power to create major volatility. There are no guarantees as to what exactly may happen but I feel it is fair to say that the pound will remain under pressure for some time yet as the Brexit negotiations between Britain and the EU will take a minimum of two years to be completed which leaves a very long period of uncertainty to come.
The Scottish second independence has been postponed after tragic the waste of life from the terror attack at Westminster Palace which happened yesterday. Whilst the Scottish Parliament are expected to vote in favour of a second referendum it will be the tone from Nicola Sturgeon after the vote which could play on sterling exchange rates.
If you would like further information on Australian dollar exchange rates or any of the major currencies and to discuss how we can assist 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]