Over the last 4 weeks there have been opportunities for clients selling pounds to buy Australian dollars and vice versa. A month ago GBPAUD mid market exchange rates were trading close to 1.87. Following the UKs decision to extend Article50 by 6 months the pound lost momentum and dropped to 1.81 just over 10 days ago. However the pound has fought back with mid market rates now at a 10 day high of 1.84 due to the economic data released in Australia.
Quarterly inflation numbers for Australia released in the early hours of Tuesday morning dropped to 0% which is a major concern. Off the back of the news ANZ and TD securities which are well respected in their fields have both predicted that an interest rate cut of 25 basis points is on the horizon. Past history tells us when a central bank cuts interest rates the currency in question tends to be sold, meaning it becomes less valuable, hence the reason why pound to Australian rates have risen.
Looking further ahead, UK Prime Minister Theresa May is going to continue the negotiations with the leader of the opposition Jeremy Corbyn. The Prime Minister is hoping to thrash out a deal early next month in a bid to avoid European Elections. The reality is the PM is not prepared to remain in a customs union therefore its difficult to see how they will find a solution. Therefore I expect the UK will take part, which will cause more uncertainty for the PMs future and consequently the ongoing Brexit saga.
However short term the pound could actually make gains against the Australian dollar due to the problems down under. Next week Australia release their latest building permits and home sales numbers. If they fail to impress then the chances of an interest rate cut by the Reserve Bank of Australia will increase which could put major pressure on the Australian dollar.
If you are looking to buy or sell Australian dollars in the upcoming months, I recommend that you get in touch. The currency company I work for offers fantastic rates whilst providing regular market information. My direct email address is [email protected]. Feel free to email with a detailed description of your requirements and I will respond with your options and the process. If you are using a currency provider at present feel free to drop me an email for a quote.