GBPAUD has broken through fresh highs touching the best rates since May to buy Australian dollars with pounds. This is presenting an excellent opportunity that could shift dramatically in the next 24 hours as the UK sees its latest UK interest rate decision. The decision tomorrow is going to be the biggest short term driver on GBPAUD rates and any clients looking to buy or sell should be preparing for movement.
The rates have been rising as the pound strengthens on the back of expectations the Bank of England will raise interest rates tomorrow. The Aussie dollar too has been weaker on the basis of a much longer time before the Reserve Bank of Australia raise their interest rate. Investors had previously been anticipating the interest rates would be hiked sooner by the RBA, perhaps in 2018.
This has seen the Australian dollar weaker as investors who had previously taken up positions believing the Aussie will strengthen now seek higher returns elsewhere. The Australian economy is one of the worlds strongest having remained fairly immune from the concerns and fears that have blighted other global leaders.
The outlook remains positive for the Australian dollar which could well see the currency stronger for longer, overall I would not be looking for a much weaker AUD longer term, I therefore feel if you need to buy Australian dollars with pounds, that locking in something on this spike is very sensible. Otherwise tomorrow’s UK Bank of England decision is the key news for the pound that would see rates changing.
If you have a transfer buying or selling Australian dollars making plans around crucial events is key. I would expect the GBPAUD rate could rise as high as 1.75 but drop as low as 1.68 if the Bank of England fail to meet with expectations.
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