GBP/AUD rates have fallen below 1.60, with the AUD gaining support ahead of the UK’s Brexit.
The AUD gained momentum during Wednesday’s trading session, pushing rates under the 1.60 resistance level. This has provided those clients holding AUD with another fantastic opportunity to sell their positions, as uncertainty surrounding the UK economy continues to help support the AUD’s value.
The move under 1.60 was also supported by the US FED’s decision to raise interest rates in the US, a result widely anticipated by investors.
It was somewhat surprising to see the AUD strengthen as a result of this, as typically you see it weaken as the AUD is considered a riskier currency. However, last night’s move proves that the current sentiment regarding the Australian economy is positive and the uncertainty surrounding the UK economy is still very much a negative in the eyes of investors.
The Australian economy has released a run of positive economic data and last night’s official Unemployment figure showed a fall from 5.9% to 5.7%. This is another reason the AUD has managed to break through 1.60 but despite the current positive trend I am still wary about assuming the current spike will continue at the same pace.
The UK is fighting an uphill Brexit battle and has done for many months but with Article 50 on the verge of being triggered and layers of uncertainty regarding future policies slowly being removed, the Pound may start to gain a foothold sooner rather than later.
We also need to remind ourselves that the current market remains unpredictable at best and with global investor confidence fragile, commodity based currencies such as the AUD are also at risk. They are reliant on global growth, in Australia’s case particularly the export of its raw materials to China. Therefore, any slowdown in this sector will always hit their economy hard and the AUD will inevitably suffer as a result.
If you have an upcoming GBP or AUD currency transfer to make, then we can help you navigate this turbulent market by keeping clients up to speed with all the latest developments regarding Brexit and beyond.
If you would like us to monitor the market for you ahead of a currency exchange, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on 0044 1494 787 478 and ask one of the team for Matt.
Alternatively, I can be emailed directly on [email protected].