The Pound found some much needed support during trading today, with news overnight confirming the Reserve Bank of Australia (RBA) had kept rates on hold.
This decision was expected and likely factored in by investors to the current market price but it was likely recent comments by RBA members, which has kept investor confidence in the AUD at a minimum.
They confirmed that the RBA were unlikely to raise rates until 2019, news which sapped investor confidence in the Australian economy.
GBP/AUD rates moved back above 1.72, hitting 1.7227 at today’s high.
This move was most welcome by those clients holding the Pound following last week’s slide, which came about after the Bank of England’s (BoE) interest rate decision and the subsequent statement by governor Mark Carney.
Despite the central bank raising rates for the first time in 10 years, it is likely that investors had almost fully factored in the 0.25% hike.
The reason for the Pound then dropped sharply, is a likely reaction to Carney’s subsequent statement. He remained fairly downbeat about the UK economy and emphasized the negative impact any further rate rises could have, whilst Brexit negotiations were on-going.
If you combine this with the negative perception already engulfing the UK at present, and the Pound was always likely to sustain a major upturn.
Therefore, even a relatively small spike, such as the one we have seen today should be considered a positive for those clients with a Sterling currency requirement. I do not believe that the Pound can sustain any aggressive increases towards 1.80 against the AUD, particularly in the short-term.
The UK’s economic outlook remains relatively bleak and with so many unanswered questions surrounding Brexit and which direction the UK economy will take following our on-going separation from the EU, are you prepared to risk further losses for perhaps only marginal gains?
If you have an upcoming GBP or AUD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.
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.
Feel free to email me directly on [email protected] to find out all the options available to you ahead of your currency transfer.