GBP/AUD rates have touched 1.70 again this morning but as of yet, the Pound has not found enough market support to drive it through this level sustainably.
The AUD has lost over five cents against its Sterling counterpart in recent weeks and with 1.70 now a key resistance level on the pair, it will be interesting to see how the market evolves over the coming days and weeks.
Sterling has benefited from the triggering of Article 50 and the removal of an element of uncertainty surrounding the whole saga. It was also boosted, somewhat surprisingly, by UK Prime Minister Theresa May’s political U-turn last week and the snap general election she announced for June. Historically this would put pressure on the currency in question but the positive reaction for GBP, was possibly due to investors pricing the expected outcome and at least another four years of the same government, which brings with it an element of stability.
Another reason we may have seen the AUD’s value decrease is the recent slowdown in the Chinese economy. China as regular readers will know is Australia’s closet ally in terms of trade and despite its ‘cloak & dagger’ style economy, which releases only limited information, there has been a recent slowdown in its imports of Australia’s vast supply of raw materials. With Australia’s mining industry amongst the highest in global labour costs, any slowdown in its exports can have an instant detrimental effect on their economy and ultimately the AUD.
Whilst these figures will fluctuate the recent downturn could be another reason the AUD has lost value of late.
Despite its recent decline, those clients holding Sterling may wish to take advantage of the current spike, especially when you consider reports this week from the IMF, who indicate that the global economy is actually gaining momentum, news which is positive for commodity based currencies like the AUD.
Whilst even medium-term outlooks should be taken with a word of caution, particularly in the current market, any advances for global trade could help the AUD realign its recent losses and any clients looking to buy the currency could see the current market opportunities dissipate.
If you have an upcoming GBP or AUD currency transfer and would like to be kept up to date with all the latest market movements, or simply wish to compare our award-winning exchange rates with your current provider, then please feel free to contact me on 0044 1494 787 478 and ask one of the team for Matt.
Alternatively, I can be emailed directly on [email protected].