The following report looks at factors that have impacted GBPAUD exchange rates. As well as looking at factors that could provide clues as to where exchange rates are heading next.

GBP/AUD rates trading around 1.70 but where next?

GBP/AUD rates have dipped below 1.70 on the exchange, giving those clients holding AUD the opportunity to sell their positions at some of the best levels seen in the past three years.

Whilst many could point to the lows of 2012/2013, when GBP/AUD was trading just above 1.40 and I feel there is further scope for improvement, I am wary about putting too much faith in an Australian economy, which is so heavily reliant on outside influence.

Yes, the Pound is suffering against all of the major currencies and we have discussed the reasons for this in depth but primarily it is the uncertainty surrounding how the UK will move forward as a single entity, outside of the EU. However, this does not necessarily mean that the current trend will continue at the same pace and we also need to consider the Reserve Bank of Australia’s (RBA) stance and how this will affect the AUD moving forward.

Change of guard at the RBA may not boost AUD value further

The recent change in hierarchy, with Philip Lowe replacing Glenn Stevens, has possibly muddied the waters somewhat but what is clear is that the Australian economy remains extremely fragile. When you consider the recent interest rate cuts and a commitment to further cuts to support any downturns in China, Australia’s largest trade partner, then it is clear that all is not well down under.

I feel that the negative factors surrounding the UK economy have now been factored into GBP/AUD levels and as such I would expect the Pound to find support around 1.70, as it has done in recent weeks.

Therefore those clients holding Australian Dollars should be taking advantage of this and protect themselves as we head into the last quarter of 2016. A further spike towards 1.60 is unlikely in my opinion and any small improvement in investor’s perception of the UK economy could lead to a Sterling recovery over the coming months.

Those holding Australian Dollars may want to get in touch with us to discuss a transfer, our friendly team of brokers are on standby to discuss your requirements. Call us today on 01494 725 353.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.