The AUD made further inroads against Sterling overnight, following positive employment data released in Australia.
The International Monetary (IMF) also raised China’s growth forecasts for 2018-2020 to 6.4%, an improvement of 0.4%. With Australia’s close trade to ties to China, any improvement in the Chinese economy inevitably helps boost the AUD’s value.
Sterling has lost almost two cents at its low against the AUD over the past 24 hours, with the pair now trading around 1.62.
The market perception surrounding the UK economy remains weak, with investors extremely sceptical about how Brexit negotiations will develop and the potential negative impact this will have on the UK economy. This is likely to drive market sentiment for the foreseeable future and as such, I am not anticipating a major improvement for the Pound any time soon.
Investors will also be looking towards any developments between the US & North Korea, which is obviously a destabilising global situation.
This is likely to drive global currencies and commodity based assets such as the AUD, could be amongst the hardest hit. Global fear generally means investors will start to pull funds away from riskier, potentially higher yielding currencies such, as the AUD and return them to safer havens such as the CHF or historically the USD.
This means that the AUD could be inadvertently weakened by any increase in the rhetoric surrounding the Korean Peninsula, so clients may wish to consider this ahead of any AUD currency exchanges this week.
Whilst the recent economic data emanating from Australia has been fairly strong, Sterling should find some support above 1.60 over the coming days.
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Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
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