Economic data in recent weeks has meant that GBPAUD exchange rates have increased by 8 cents and broken through the 1.70 barrier. The reason for the improvement is positive news coming from the UK in regards to Brexit and a dovish outlook from the Reserve Bank of Australia.
Brexit negotiations are heating up and decisions are close to being made. Friday evening Michel Barnier gave a two week deadline for the UK to make key decisions surrounding EU citizens’ rights, the Irish border, and the UK’s “divorce bill”.
The theory on the market is that if the UK and EU come to an agreement in the upcoming weeks and trade negotiations start before or just after the turn of the year, this could give sterling exchange rates a considerable boost.
The Reserve Bank of Australia have been given dovish statements of late and the recent RBA minutes last week confirmed that the RBA have no interest of raising interest rates anytime soon.
Couple this with Iron ore prices tumbling down under and some forecasters suggesting another substantial fall is on the horizon due to the slowdown in China’s construction industry you can understand why the Australian dollar is under pressure.
Looking further ahead if the Australian economy continues on the same path and the UK reach a deal with the EU so trade negotiations begin, I expect GBPAUD will break through 1.75.
Therefore if you are buying Australian dollars with sterling and are prepared to take the risk holding off may provide a better exchange rate in the weeks to come, however if you are selling Australian dollars to buy sterling now is the time to convert your currency.
For people that are converting pounds and Australian dollars for the first time, it is essential that you get the very best exchange rates. If you have used a brokerage for many years or have been referred a brokerage I strongly recommend you compare rates to make sure you get the best price possible and therefore save money. This simple exercise takes two minutes and in the past I have saved clients hundreds and in some instances thousands of pounds.
My direct email is [email protected] Dayle Littlejohn.