The pound to Australian dollar rate is on a lower trajectory as sterling comes under renewed pressure and Australian economic data continues to perform well. Most analysts feel sterling will move lower so I feel rates under 1.60 will soon once again be a very real possibility presenting even better opportunities for clients looking to sell AUD for the pound.
Most of the focus on the Australian dollar has centered around the likelihood of further interest rate cuts or hikes down under. With the Australian economy very close to breaking the record for the longest recession-free economy it ties in quite fairly that the currency would perform well. Despite the prospect and outside chance of further interest rate cuts down the line I think the currency will remain very strong. The Australian dollar enjoys lots of favour because of the high interest rates on offer, offering a much better proposition for clients looking to secure a good return.
With the UK about to trigger Article 50 the main focus of the markets will be on sterling which will be the big driver. Unfortunately for Australian dollar buyers waiting around to pick up patchy pockets of Australian dollar weakness is unlikely to do anything material to them to help avoid the harsh reality of a much weaker pound following Article 50 being triggered.
Next week is Unemployment data for Australia which if worse than expected could present some slightly better opportunities for greedy Aussie dollar buyers who missed the boat earlier this year. But with some major political changes under way in the UK a move below 1.60 seems the great chance for short term movements on this ever uncertain pair.
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