The UK is in mourning once again following last night’s horrific terror attack in Manchester, the worst on these shores since the London bombings.
Our thoughts and prayers are with the families of the victims involved, with the UK needing to pull together in times of such adversity.
The markets have just started to react following the disaster and as the trading day gets underway, the Pound still finds itself under pressure against the AUD.
GBP/AUD rates have dropped to 1.73, with the AUD benefiting from Sterling’s downfall. In truth, the Pound was struggling for much of yesterday, having made inroads against the AUD last week.
Sterling had threatened to make a move to 1.80, as the Pound found plenty of market support before hitting resistance under this key threshold. This negative trend was intensified yesterday, with reports surfacing that Brexit negotiations have already hit a wall already.
The UK have said they are willing to step away from negotiations, which backs up the Prime Minsters tag line that “no deal is better than a bad deal”.
The AUD gained almost two cents at yesterday’s high and the question now is whether this trend is likely to continue over the coming days?
I have continually advocated that clients look for short-term opportunities in the current market and the recent downturn is testament to this.
No one can predict exactly how a currency pair will evolve but with so much uncertainty surrounding the UK, in regards to what deal we will negotiate in our exit from the EU and upcoming general election, now is not the time to be gambling on a consistent upward trend for Sterling.
Similarly, the AUD itself is struggling again a backdrop of uncertainty. Iron Ore (Australia’s largest export) prices have fallen sharply, which is bad news for commodity and export economies such as Australia’s. The reasons attributed to this fall was put down to recent oversupply but with China’s (Australia’s main purchaser of iron ore) economy clouded in mystery, there are many variables to consider and the AUD has lost investor confidence as a result.
Whilst the current malaise is likely to restrict any major advancements for the AUD, as I’ve already alluded to investor confidence in the UK economy and the Pound, is fragile at best.
Client should look to protect their upcoming currency transfer by way of a forward contract wherever feasible and be realistic with any rates they are targeting in the current market.
If you have an upcoming GBP or AUD currency requirement 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].