Is now the time to sell Austrlian dollars and buy sterling?

AUD to GBP Higher Ahead of UK Inflation Data

Last week the Australian dollar fell to multi year lows against sterling and the US dollar and the economic indicators suggest that further losses are on the horizon for people selling Australian dollars. For people that are researching potential events that will impact the Australian dollar, you should have come across the reasons for why the Australian dollar has been devaluing. The key driver is the strength of the US dollar.

Carry traders which borrow money in low interest rate jurisdictions and invest in high interest rate jurisdictions are not choosing the Australian dollar like they once were because US interest rates are now higher than in Australia and it looks like the gap is set to widen when the US raise interest rates in December.

The other major problem for Australia is that they are stuck in the middle of the trade war between the US and China. Australia heavily relies on China for trade, however Australia also relies heavily on the US for security. At present the trade war between the two leading countries is having a negative impact on the value of the Australian dollar and I expect this trend will continue.

As the UK are now closer to securing a deal with the EU, it looks like GBPAUD exchange rates are heading in one direction and that’s towards 2. For people that are selling Australian dollars to buy sterling you are still generating an additional £15,000 on a 500,000 transfer compared to pre Brexit levels, therefore taken advantage now may pay be your best option.

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].