Pound to Australian Dollar exchange rates were taking a clear hammering at the beginning of the week, and very little of it was due to events in Australia.
Events in the UK and globally have played well into the hands of anyone considering selling Australian Dollars to buy Sterling. Just since July 7th they have gained over 4 cents against Sterling with the global climate still pointing to further improvements.
Firstly, the concrete stuff. One of the backtracks on Sterling has come from a reversal in the enthusiasm for an interest rate hike in the UK in the short-term. Slightly lower inflation outlooks mean the pressure to raise rates in order to control prices has lessened, and on Tuesday two members of the Bank of England Monetary Policy Committee confirmed this.
Therefore, without a medium term expectation of a rate hike, a key pillar of support for Sterling has been lost. Making it more likely for further gains for AUD sellers in the short-term.
The other helping hand for sellers came from the US.
Uncertainty surrounding the US Dollar causes capital flight to go elsewhere. Given the relatively high interest rate available in Australia, this can be a key beneficiary in these situations. As investors flee to the AUD, it’s value sees a parallel boost through demand.
The latest Trump scandal comes under that bracket. Could this be the smoking gun for the Trump Presidency? Markets were certainly concerned, the Dollar suffered from a mass sell-off of stocks in reaction to the news.
Whether this scandal will be swept under the rug or continue to undermine confidence in the US political apparatus is the unknown factor here.
However, this does point to renewed urgency for anyone planning a foreign currency transfer to buy Australian Dollars to ‘get their skates on’.
I strongly recommend that anyone with an Australian Dollar based currency requirement should contact me on email@example.com to discuss a strategy for your transfer aimed at maximising your currency return.
You can also contact me directly on 01494 787 478 and ask the reception team to speak with Joshua.
I have never had an issue beating the rates of exchange on offer elsewhere, so a brief conversation could save you significant sums of money on a prospective transfer.