Throughout Friday mornings trading session the missile attacks on Syria, sent a worrying message throughout the currency markets and the Australian dollar (a commodity currency) devalued. In times of uncertainty its a common trend for commodity currencies to devalue as they are seen as a risk. A strategy for speculative currency traders is to sell off their positions and purchase ‘safe haven’ currencies such as the US dollar or Swiss Franc. Looking ahead if further unexpected attacks take place in the upcoming weeks I expect the Australian dollar to continue to lose value.
Interest rate cuts on the horizon?
As our regular readers are aware Australia heavily relies on China and Paul Dales Chief Australian and New Zealand economist for Capital economics expects the RBA will make cuts to interest rates before they are hiked as forecasters are predicting a slowdown in China int the near future. This does not surprise me as it appears the monetary policy program has eased which is now not having a positive impact and China’s debt now exceeds 250% of GDP.
Time to sell Australian dollars and buy sterling?
If you are emigrating to the UK from Australia or purchase goods and services from the UK, I believe now is the time to make the purchase. UK Prime Minister Theresa May has brought certainty to the pound by triggering Article 50 and a slow down is on the horizon for China. Unless Brexit negotiations break down at the first hurdle, present exchange rates could be the best we are going to see for some time.
For readers that are converting Australian dollars into sterling for the first time, if the UK public had not voted out of the EU, exchange rates could have still been close to 2 to 1, which means you would receive 35 cents less. To put this into monetary terms on a 400,000 Australian dollar transfer you would have received over £40,000 less.
Are you needing to buy or sell Australian Dollars in the upcoming weeks, months or years? If you are I can help you save money…
The currency company I work for has won numerous awards for exchange rates therefore it enables me to trade Australian dollars at rates better than other brokerages and high street banks. I would recommend sending an email with a brief description of your requirements and your timescales (this is very important, the length of time you have will change your options) and I will email you with my strategy and the process of using our company [email protected].