The pound has seen an excellent week so far which has created a sudden opportunity for those looking to buy Australian dollars. Rates for GBP EUR peaked at 1.7719 today before slipping back in afternoon trade.
The pound has been given a boost this week as concerns over Brexit appear to have softened for the time being. French president Emmanuel Macron was in London at the start of the week and he signalled that Britain should have a bespoke trade agreement.
Even Ex-Prime Minister David Cameron was caught unware with a microphone saying that Brexit has “turned out less badly than we first thought”.
Clients looking for further gains could be hard pushed considering the changing tone coming from the Reserve Bank of Australia (RBA). The central bank is likely to follow in the footsteps of other global central banks and raise interest rates. Canada, the US and the UK all raised rates in 2017 and the markets are starting to prepare for a possible rate increase down under in June 2018.
The Australian dollar is extremely susceptible to the current events in the US and any deterioration in the political arena with more government shutdowns could weigh heavy on the US dollar whilst proving beneficial for the Aussie. As such the move to 1.80 could be a tall order for GBP AUD although any positive rhetoric from Brexit is likely to see a further boost for this pair.
In a quieter end to the week ahead of Australia Day tomorrow the markets will focus heavily on the official UK Gross Domestic product numbers. Although the expectation is for a drop in the numbers, something that has also been predicted by the International Monetary Fund, there are growing suggestions that there could in fact be a spike higher. A move higher to 1.8% for GDP in my view would help reinforce the push higher and could see another window of opportunity for buying dollars.
To discuss how these event impact on the currency markets and how we can assist with the timing of any transfers then please feel free to get in touch with me James and I will be happy to discuss. You can email me at [email protected]