Will the Pound continue to strengthen?
Sterling has strengthened significantly against the Australian Dollar of late. GBP/AUD now has hit 1.74, the highest levels in the last seven months. This is due to impressive UK PMI (Purchase Managers Index) figures and UK construction data.
Despite positive data from down under from the service and tourist sector, there are worrying signs of an overpriced property market. It is a similar situation to London with properties in high wage areas becoming far too overpriced, specifically Melbourne and Sydney. The problem is being exasperated by foreign investors willing to pay the excessive prices. During the early hours we will see the release of Australian housing sector figures and this could well influence GBP/AUD levels. New House sales being the key data release.
The Reserve Bank of Australia (RBA) also kept rates on hold at 1.5% for the ninth month in a row.
Australia are heavily dependent on the Chinese purchasing their raw materials and we have sen a decline in Australian trade balance date which has caused the Aussie to dip in value. Chinese growth although positive is slowing.
Domestic Factors that will influence GBP/AUD
A snap election would usually weaken the currency in question, but on this occasion we have see it strengthen. It was a shrewd move by Theresa May to call an election when the competition is so weak. Sun Tzu would be impressed. With the Conservatives clear favourites to win the election it has seen investor confidence grow as a conservative government is seen as a positive for the UK economy. The pound has rallied as a result. I would not expect a surge in strength if they are elected however as the market moves on rumour as well as fact and I think a conservative victory has already been factored into current GBP/AUD levels.
If you have a currency exchange to perform in the coming days, weeks or months then you are more than welcome to speak with me personally as I will be more than happy to assist you both in trying to time a transaction and getting you the top market rate when you do come to make your transfer. A small improvement in a rate of exchange can make a huge difference, so it is well worth taking a couple of minutes to email me you may find you save yourself hundreds if not thousands of Pounds. You can contact me (Daniel Johnson) on [email protected] and I will endeavour to get back to you as soon as possible. Thank you for reading.