Since the start of the year GBPAUD exchange rates have improved by over 10 cents, and clients converting £200,000 into Australian dollars are now achieving an additional 25,ooo dollars.
The Australian dollar continues to struggle on due to the over inflated housing market which is a reason why the Reserve Bank of Australia continue to keep interest rates on hold at 1.5%. Furthermore ‘trade wars’ between the US and China (Australia main trading partner), is causing investors to move away from risky commodity currencies such as the Australian dollar.
The pound has had a good run of late due to the UK securing a transitional deal and the Bank of England hinting that an interest rate hike is likely for June. Today the UK will release their latest average earnings numbers and on Thursday their latest inflation numbers. The consensus is for average earnings to outpace inflation for the first time in many years.
If this is the case, an interest rate hike looks almost certain and therefore I expect the pound may rise slightly against the Australian dollar. However I expect that the market has already priced in the interest rate hike in May, therefore I don’t see the pound making substantial gains.
Looking further ahead I don’t believe it’s all smiles for Australian dollar buyers. The most important element of Brexit is to be decided which is the trade talks. Over the last 18 months we have seen the pound come under pressure when a fresh round of Brexit talks begin. If you need to purchase Australian dollars short to medium term, this week could provide the best opportunity for some time to come.
If you are buying or selling Australian dollars in the future, I would strongly recommend getting in contact to discuss your situation. The company I work offers a proactive service to offering economic information whilst having the ability to offer award winning exchange rates. Feel free to email me with your requirements along with the timescales you are working to and I will respond with my forecast and the process of using our company [email protected].