Sterling is under pressure once again, with heavy losses against all of the major currencies.
The AUD has gained almost two cents at the high since yesterday, with the GBP/AUD dropping to 1.6746 at this morning’s low.
Brexit fears and comments from two Bank of England (BoE) members, seems to have sapped the minimal market confidence that Sterling had started to rebuild.
This drop is a prime example of why clients holding the Pound should be looking to protect their positions wherever possible, as a sustained increase in value is highly unlikely in my opinion.
It feels as if Brexit is starting to take a vice like grip on our economy, which is in turn having a detrimental effect on Sterling’s value.
Add to this the current state of limbo surrounding UK politics and uncertainty over what agreement is in place between the Tories and the DUP party and you can understand why investor confidence in the UK is low.
We also had two members of the BoE speaking yesterday, neither of which even mentioned a prospective interest rate hike in the UK.
Considering the Pound’s recent momentum had been built around comments made by BoE governor Mark Carney, who alluded to the fact the central bank could raise rates, the mixed messages are hardly likely to assist any upturn for the Pound.
Looking at the Australian economy and there is a concern amongst some quarters that the current housing bubble is set to burst, which could put pressure on the AUD moving forward.
Being a commodity based currency the AUD relies heavily on global growth remaining strong and whilst the current climate is pushing investors towards the AUD and its higher yielding interest rates, any slowdown in its export sector will hit the Australian economy hard and the AUD will almost certainly suffer as a result.
Therefore, I would be keen to take advantage of the current sell prices, which are extremely attractive when you consider the history on the pair.
This will remove any uncertainty from what has become a very unstable market.
If you have an upcoming GBP or AUD currency transfer to make 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].