GBP/AUD rates have remained range-bound over recent days, with the Pound struggling to break through 1.65.
The AUD has found plenty of support around this level, despite the Pound gaining a foothold against most of the major currencies since last week’s historic events.
It seems as though investors are still airing on the side of caution when it comes to the UK economy and its prospective future prosperity following the start of our separation form the EU.
It’s a strange time in the currency markets however, as investors and clients alike must start to look forward following the triggering of Article 50 last week. Many clients are asking me how the Pound will react over the coming weeks and I still feel that any clients holding Sterling should be looking for short-term market opportunities whilst the current uncertainty remains.
Its seems as though so much talk and focus was centred around the UK’s Brexit since the unexpected referendum result last June, that people almost forget that there was an active market prior to this point. It does feel like there is something of anti-climax about the whole situation but I’m convinced that talk of Brexit and the negotiations between the UK government and EU regarding terms of the separation will still fill column inches and dominate headlines for months, if not years to come.
However, we also need to move ourselves away from the topic to some extent, as the markets will start to look at other factors and it be that economic data (which is predominantly what drives the currency markets) will start to hold more weight again as we move forward.
Personally, I still feel that the investor confidence in the UK economy is not strong enough to sustainably push GBP/AUD rates towards 1.70. However, any positive developments regarding the UK’s separation and any deals still in place with the EU will probably benefit those clients holding Sterling and inadvertently weaken the AUD as a result.
The AUD has performed well against the Pound for some time but with China’s demand for their huge reserves of iron ore slowing and high labour costs in the mining industry putting pressure on the Australian economy, now could be the time to sell any AUD positions.
Client should to take advantage of what are extremely attractive levels, especially when you consider the history on the pair and not gamble on what has become an increasingly volatile market.
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].