Will GBPAUD remain above 1.70?

AUDGBP Starts the Week Higher After Jobs Slump

The RBA (Reserve Bank of Australia) Interest Rate decision meeting overnight has not yielded any big surprises, as expected the RBA kept their base interest rate on hold. Many commentators are predicting some form of movement later this year, the jury is out as to what exactly we can expect but many commentators are now eagerly awaiting the next move. Personally I think clients looking to buy Australian dollars should be moving sooner to try and take advantage of the recent spike as a weaker pound could easily disrupt the current situation.

This week the big news is the US Federal Reserve Interest Rate decision in the US. The Federal Reserve have been on a path to raise interest rates which is having an effect on all currencies. In terms of the Australian dollar the expectation is that a stronger US dollar would weaken the Aussie. This was a trend we have seen in recent years as the previously higher yielding Aussie was swapped by investors for the US dollar. However recently some steps back by the Fed have contributed to a stronger Aussie. With this week’s US decision unlikely to see a hike and more likely to see a slightly more dovish tone from the Fed, I expect the Aussie could strengthen this week.

Looking then to the pound, well I would not be surprised to see GBPAUD lower on sterling weakness too. The pound remains at the mercy of the market’s views on Brexit and overall the likelihood is that the UK and the pound will come off worse. The recent spike for sterling will I believe not be sustainable and clients looking to see a stronger pound need to wait until after the UK General Election.

For more information at no cost or obligation on the best strategies to help with the planning and execution of any currency transfers you will need please feel free to contact me Jonathan Watson directly by emailing [email protected]. Thank you for reading and I look forward to hearing from you.