A Good Start to the Week for AUDGBP

AUD GBP Sees Strong Support with Sydney Reopening

It’s been a good start to the week for AUDGBP, as mid-market exchange rates have increased from 0.55 to 0.5556.

UK Growth Causes Sterling to Lose ValueCapital Gains to Help With UK Recovery

Now that the furlough scheme is coming to an end, the Chancellor Rishi Sunak has started a review of capital gains tax, as this could be a way of recuperating billions of pounds spent due to the Covid-10 outbreak. He was told by the independent watchdog that taxes will have to rise in a bid to take control of debt and the Office for Budget Responsibility exclaimed that £60 billion needs to be raised and that will be done through higher taxes or austerity measures. If Capital gains does rise, people that sells their homes and make a profit, and this could slow the housing market which the Chancellor will take into consideration.

Brexit Debate Continues

Throughout this month EU negotiator Michel Barnier and UK negotiator David Frost will continue to debate Brexit and trash out a trade deal. It was only last week that Michel Barnier stated that there were ‘significant divergences’ between the UK and EU. Over the last 3 years, sterling exchange rates have increased and declined off the back of Brexit released news. When the negotiations go well, sterling rises in value and when the negotiations go badly, sterling loses value. Now that the UK only have 4 months to reach a conclusion, I expect AUDGBP exchange rates to be extremely volatile due to this news story.

NAB Survey Provides Confidence For the Aussie

With the UK economy struggling and Brexit negotiations not going particularly well there is a strong argument that AUDGBP could rise in the months to come. The NAB survey released this week has also provided confidence for the Australian dollar as the numbers showed a sharp recovery in business confidence for June. However it’s important to know that these numbers were for the end of June, before parts of Australia went into lockdown due to Covid-19.

However with the US and China continuing its trade war, the White House have announced that they are looking into Chinese companies that work out of the American markets. As we know developments in China tend to have a direct impact on Australia, therefore clients involved in buying or selling Australian dollars need to understand events that materalise from their major trading partner.

If you are looking to purchase Australian dollars with pounds in the months to come, volatility should be expected. For sterling to improve in value it appears that a Brexit trade deal is needed. However if this doesn’t materialise it could make purchasing Australian dollars extremely more expensive. If you would like further information regarding AUDGBP exchange rates, feel free to fill in the form below.