GBP AUD Finds Support at 1.70 (James Lovick)

AUDGBP Makes Back Some Lost Ground From Last Week

The pound remains on a stronger footing against the Australian dollar this afternoon after all the recent political developments. The Australian dollar has come under some pressure after the elections in New Zealand and Germany have created ongoing uncertainty for the Aussie. The hung parliament which has come about in New Zealand could take weeks before a coalition government is formed.

Meanwhile in Germany it could take 2-3 months before a government is formed which is also seeing some investor caution which doesn’t bode so well for the Australian dollar. However in the case of Germany it will come about that Angela Merkel will serve her fourth term as Chancellor and so when confidence is restored this should help strengthen the Aussie.

Clients looking to buy Australian dollars with pounds are seeing a good opportunity to purchase although the pound did see a wobble on Friday after the eagerly anticipated Theresa May speech in Florence did not lift the pound. Brexit negotiations were kick started yesterday and any developments here are likely to direct GBP AUD exchange rates. Any positive noises from Brexit secretary David Davis or his counterpart Michel Barnier could help see the pound move higher especially if the door to discussing a future trade deal between the UK and EU is opened. For the moment levels have broken back over 1.70 for GBP AUD presenting good levels for dollar buyers.

Economic data down under is quiet this week and focus is likely to move to the escalation of tensions between the US and North Korea. The Australian dollar is perceived as a riskier currency so any further escalation between the two could see the dollar come under added pressure. Those clients looking to sell Australian dollars should be aware of the situation as any deterioration could see the Aussie fall sharply lower.

If you would like further information on sterling or Australian dollar exchange rates or any of the major currencies and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on jll@currencies.co.uk