GBPAUD crashes below 1.70 (Dayle Littlejohn)

At the end of last week the eagerly anticipated Bank of England interest rate decision provided a huge shock for clients buying Australian dollars. The Bank of England hiked interest rates to 0.5% and forecasters were predicting the pound would continue to climb against the Australian dollar and potential reach the mid 1.70s.

However as the hike was seen as ‘dovish’ because two of the members of the Bank of England voted to keep interest rates on hold and growth forecasts for next year were cut, the pound plummeted against the Australian dollar. The next question is will the pound recover and break through 1.70 once more or have Australian dollars buyers missed their opportunity.

Inflation numbers down under remain under pressure which means the likelihood that the Reserve Bank of Australia will change their tune in regards to interest rates is unlikely. Therefore I expect the Australian dollar to remain under pressure.

Brexit headlines will continue to drive GBPAUD exchange rates. Negotiators have announced that there will be three more rounds before the turn of the year and UK Prime Minister Theresa May will be hoping that stage 2 negotiations would have begun. If this is the case I expect the pound would have broken through the 1.70 barrier and actually progressed closer to 1.75. Therefore if I were selling Australian dollars to buy pounds I would take advantage of the recent movement and look to make the conversion sooner rather than later.

If you are buying or selling Australian dollar in the upcoming weeks, months or years feel free to email me with the reason for your conversion (company invoice, buying a property) and the timescales you are working to and I will email you with my forecast and the process of using our company [email protected].

** If you are already using a brokerage and would like to know if you are receiving the best rates possible email me with the exact figures and I will reply with our live price. This will take you minutes and in the past I have saved clients thousands! **