The Pound has made significant gains against the AUD overnight, gaining almost three cents.
It currently trading at 1.8176, having been marooned below 1.79 during the early part of the trading week.
What’s surprising is that this improvement has come about despite the on-going uncertainty surrounding the UK’s impending Brexit, with talks between the UK and EU once again seemingly at an impasse.
This indicates that last night’s heavy losses for the AUD were linked to a sharp drop in investor confidence in the AUD, rather than any major influx into the Pound.
This means those clients holding GBP and looking to buy AUD have been given a window of opportunity, which equates to an additional 3000 AUD on a 100k GBP/AUD currency exchange.
The reason the AUD lost significant value is likely linked to comments made overnight by the governor of the Reserve Bank of Australia (RBA) Philip Lowe, who indicated that the central bank were unlikely to raise interest rates anytime soon, meaning that they will likely be kept at record lows for the foreseeable future.
The Australian economy was already under pressure due to the current trade standoff between the US and China. With no long-term solution in sight, despite rumours that President Trump will meet his Chinese counterpart Xi Jinping this month, the outlook for the AUD does not look overly positive.
Australia relies heavily on trade with China and with China’s demand slowing, this will inevitably have a negative impact on the Australian economy and ultimately the AUD.
With a slowdown in global growth also impacting commodity-based currencies such as the AUD, how GBP/AUD rates will evolve over the coming weeks and beyond, will depend much on whether or not the UK can ultimately agree a Brexit deal with the EU.
If the UK fails to do this, then the AUD is likely to be inadvertently boosted by a sell-off of GBP positons.
If you have an upcoming AUD currency transfer to make, you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.
Our award winning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
Feel free to email me directly on [email protected] to find out all the options available to you ahead of your currency transfer.