The pound to Australian dollar has been largely range bound in the last few weeks as fail to receive any new news which would trigger movement outside of the current levels. The GBPAUD rate range in the last month has been just 3 cents which whilst important is not a particularly big move for this pair.
In times of changing fortunes on the currency markets we can expect GBPAUD rates to fluctuate perhaps 5-10 cents in a busy period as the market adjusts to new news. There are many different factors which drive changes on the Aussie, including not only Australian data but also attitudes to risk in the currency markets.
As a ‘commodity currency’ the Aussie will rise and fall according to the outlook on the global economy. As a ‘higher yielding’ currency the AUD will often rise as investors park their cash there to benefit from the higher interest rates. This is in part evidenced by the news of late on the US dollar which has been rising, as the US dollar rises we have seen the Aussie weakening. Investors are shifting funds around to take stock of the changing interest rates between the currencies.
The key Australian data is focused around a speech from Governor Bullock tomorrow who is the Assistant Governor of the RBA (Reserve Bank of Australia). This could see the pound to Australian dollar rate volatile although it is unlikely we will learn much new information. The RBA rate statement from last week failed to speak much movement, it didn’t tell us anything particularly new about the potential, or lack of any Australian interest rate changes.
There is some important news from the USA this week which could change attitudes to the Aussie, but all in all we might not see GBPAUD break from the recent ranges. For me, next week is looking a bit more interesting with the latest EU Summit where Brexit will be discussed, plus we have the latest US interest rate decision.
GBPAUD and the Aussie look to remain fairly range bound for now but this could quickly change. Using this quieter time to make plans for future developments is I believe a very smart move. For many clients buying AUD with pounds we are looking to trade GBPAUD above 1.80, for the sellers, many are targeting 1 AUD = 0.6 GBP.
If you have a transfer to make and are interested to secure your currency at the best rates with the most up to date information, please feel free to contact me to discuss further. To discuss further the market and your options please speak to me Jonathan Watson by emailing [email protected].
Thank you for reading and I look forward to hearing from you.