The Australian is really benefiting from much improved certainty around the outlook on interest rates. Interest rates are a key factor in determining the relative strength and weakness of a currency and this is of vital importance for the Australian dollar. Viewed by investors as a good currency to hold because of the higher interest rates, the Australian dollar will rise in value if investors believe that interest rate will go up in the future. If you are buying Australian dollars the shorter term outlook is not great, it is likely the Aussie will make further gains. If you have a transfer to make buying or selling Australian dollars this information will be vital to the rate in the future.
The Reserve Bank of Australia confirmed that they could well be looking to raise interest rates in the future which has helped the Australian dollar to rise against the pound. The pound is actually much weaker too since Inflation has been falling in the UK at the latest release, this reduces the chance of an interest rate hike. Clients looking to buy or sell Australian dollars for pounds could see GBPAUD test closer to the 1.60 in the next few weeks but longer term it might well recover. Only two weeks ago we were headed to 1.70 so to be where we are now is a surprise in some respects. Events could quickly change again!
News that might help would be the US dollar strengthening again. The USDAUD rate is of real importance to GBPAUD since as USDAUD is the most heavily traded currency pair, the movements on US dollar to Aussie will ‘weigh’ on GBPAUD rates. So for example lately the US dollar has been weakening, this has helped the Aussie to rise which has affected GBPAUD too.
GBPAUD is on the slide but could quickly make a recovery! Every 1 or 2 cents on a big volume of currency can make a difference of thousands so if you have a transfer to consider and wish to get the best rates and help with the timing of any deal please speak to me Jonathan Watson by eamiling [email protected].
Thank you for reading and I look forward to hearing from and assisting you.