GBP/AUD rates remain marooned in the mid 1.70’s, with the pound failing to make any inroads as the UK’s Brexit saga rumbles on.
Whilst much of the economic data emanating from Australia has improved over the past couple of months, investors remain wary about the current global climate and the on-going malaise in global trade.
|Currency Pair||% Change in 1 month||Difference on £200,000|
This leads me to the conclusion that the current value on GBP/AUD, is being defined much more by the current uncertainty surrounding the UK economy.
As the Brexit sage rumbles, we are no closer to understating its conclusion and as such, investors' risk appetite for the pound is extremely low. This in turn is helping to support the AUD, which could find its value significantly lower than its current standing.
Despite UK Prime Minister Theresa May securing her position in number 10 last week, at least for the time being, she remains under significant pressure over her current deal with the EU. Unless the terms of the backstop deal are re-negotiated, she could find it very difficult to get Parliamentary approval, which could leave the UK in the unenviable position of exiting the EU without a deal being agreed. This would likely help strengthen the AUD’s position even further and a move under 1.70 would be a distinct possibility.
This is likely to cause some concern for those clients looking to execute a GBP/AUD exchange, who may want to consider their positons ahead of the Christmas break and the subsequent market uncertainty ahead of January’s Commons vote.
Looking at the AUD and this has also struggled to gain any sustained support of late. Whilst the now well documented trade standoff between the US & China has softened slightly, there is still no long-term resolution in place. This in turn has caused a slowdown in global trade, which is negatively affecting investors risk appetite for the AUD.
With China’s demand for Australia’s raw materials softening, investors have been shying away from the riskier AUD and moving their funds back into safer haven currencies such as the USD or CHF.
With commodity-based currencies such as the AUD relying heavily on global growth to prosper, investors will be looking for the global markets to improve, before making a return. Any spike in global trade could help support a rise for the AUD and this in itself, could help drive its value against the pound, especially if the UK Government fail to rubber stamp the UK’s final withdrawal agreement with the EU.
Dealing with Matt is a pleasure, he makes everything very easy, whilst making you feel your money is totally secure.
Service was excellent from Matt Vassallo, speedy transaction at favourable rate.
Great service from Matt – helpful and patient! Would definitely recommend the company & will use them again in the future.
I have used Foreign Currency Direct for three years now and would definitely recommend them. Although my currency purchases tend to be smallish my contact, Matt Vassallo is always very polite and efficient. I shall continue to use them whenever I need Forex.