Sterling Fall Continues Against Australian Dollar

AUDGBP Exchange Rate Starts the Week in Strong Fashion

Following the recent multi year high of 2.05 the GBPAUD exchange rate has continued to fall in the last week with the interbank rate currently now sat at 1.94, just over 5% down. The main reason for the recent resurgence from the Aussie is China coming back online who are their main trading partner. This has provided the Australian economy with a boost as the raw materials they provide to China can continue to be traded. The Reserve Bank of Australia did earlier this week allude to major concerns surrounding the economy, suggesting that there could be as much as a 6% contraction in Gross Domestic Product from the Coronavirus outbreak.

There is also a chance that the unemployment rate in Australia could climb to as high as 10% in the near future which obviously puts a burden on the government. Australia is already starting to return back to normal life considerably faster than the rest of the developed world. They did have a limited outbreak that has seen only a handful of new cases in the last few days, which does provide encouraging signs for the Aussie. Australian debt to GDP ratio is only 20% so there is already major scope to recover well from any new debt added.

From sterling’s perspective as we start to see the re-emergence of the Brexit talks and the uncertainty surrounding Coronavirus I wouldn’t be surprised to see further movement against the pound. Future Brexit trade deal talks are still set to be completed by the end of December despite the disruption that has been caused. Boris Johnson is keen for his pledge to be agreed that the UK will leave the EU with or without a deal at the end of 2020.

There has obviously been fairly little detail from these talks with the main focus being COVID-19, however as the spotlight may start to change in the coming weeks, that’s more likely to put increased pressure on sterling. The GBPAUD interbank exchange rate could certainly be set to continue on its current downward trend.

If you’re considering making a transfer that involves buying or selling Australian dollars I would be more than happy to share any further thoughts with you. There is no denying the that volatility we have seen in the last few months is here to stay so there will be better times than others to complete transactions moving forwards.