As the UK continues to mourn Saturday’s horrific terror attacks, the question clients have asked me this week is how the Pound will react to the tragic events?
Whilst the markets may not have responded as aggressively as in the past, terrorism no doubt plays a part in investors thinking, with a lack of confidence around the economy in question usually the likely outcome.
Sterling was already under pressure against the AUD, with the pair moving back towards 1.70. The Pound did find some support yesterday however, with a recovery back toward 1.73 but whether this spike is sustainable or not is questionable at best.
The Pound has been fighting an uphill battle ever since it was announced that the Torries had a 20 point lead over the Labour party and the markets factored in such figures. Every pre-poll since has indicated a surge in support for Labour and with the most recent suggesting the Conservatives were only ahead by three points, has caused inventors to panic and sell-off their Sterling positions.
This in turn has benefited commodity based currencies such as the AUD, which has found plenty of support under 1.75 over the past couple of weeks.
Looking at the Australian economy and with iron ore prices low, this would usually have a detrimental effect on the value of the AUD due to Australia’s heavy reliance on their export industry. However, currently this is seen as the lesser of two the evils by investors and as such I would be taking advantage of the current sell rates if I was holding AUD.
Anyone who has an upcoming Sterling or AUD currency transfer to make can get in touch with us to run through the current market conditions & forecasts. We can assist not only with our award winning exchange rates but also our experienced insight into the current market to help guide you through your currency exchange process.
I am available on 0044 1494 787 478 and you can ask one of the team for Matt. Alternatively, I can be emailed directly on [email protected]