The pound to Australian dollar rate has risen above 1.70 which is presenting an excellent short term opportunity for clients with an Australian dollar buying requirement in the future. Sterling is potentially about to hit a brick wall with the UK elections but more worrying might be the likelihood of an interest rate cut in Australia. Next week is the RBA Interest Rate decision which could see a much weaker Aussie dollar so if you have Aussies to sell next week might be something to avoid!
I am expecting a very busy period in the next two weeks on GBPAUD exchange rates as investors get close to understanding just what the RBA (Reserve Bank of Australia) plan in the future for their interest rates. Whilst unlikely they will actually make a cut there is a real chance the RBA will be looking to see a weaker Australian dollar and if there remain concerns over the economy, particularly jobs, the RBA will want to cut sooner than later.
Overall levels to buy Australian dollars are now much higher than many believed a few weeks ago. The shock announcement of the snap UK General Election has seen the pound rise but this is unlikely to last too long. Typically a General Election leads to market uncertainty which can see a currency weaker. I have worked in this industry for almost ten years and this will be the third General Election I have seen. The last two both saw a weaker pound in the run-up to the vote which might be an opportunity for clients selling Australian dollars to buy the pound.
If you have a transaction in the coming weeks and months then making some plans sooner rather than later is the best way to navigate the uncertainty and volatility we are likely to experience. For more information at no cost or obligation please do feel free to get in touch to get an overview of the market and all of your options. Please email [email protected] to learn more about the market and all of your options.