GBP/AUD drops below 1.70

The pounds recent struggle, coupled with a strong Australian economy has presented clients looking at buying Australian Dollars with a very tough decision in my opinion. The Bank of England’s recent decision to cut interest rates along with its subsequent packages of monetary policy easing, have seen the GBPAUD rate drop by nearly 30 cents in 2016.

I personally believe that there is further weakness yet to come for the pound. The recent NIESR growth forecast has been cut from 0.6% to 0.3% for the UK, with the damaging effects of the Brexit being largely accountable for this drop. Clients with Australian Dollars to buy now have a very difficult task ahead, and personally I think that holding out for the rate to improve could be a costly decision.

Early this morning, New Home Loans for June was released, which came in much worse than expected and yet this data release still did little to the exchange rate. This highlights that the emphasis at the minute is more on Sterling's weakness rather than Australian Dollar strength.

Glenn Stevens last speech

In his last speech before standing down, Reserve Bank of Australia Govenor Glenn Stevens has urged to Australian Government to take on more debt in order to maintain the economic growth that his central bank has helped to achieve.

I believe that in his last speech he was optimistic regarding his time in power and has helped to avoid Australia from going into recession. He has recently cut interest rates to the lowest Australia have ever seen in a bid to keep the Australian economy growing. He will be replaced by Phllip Lowe on September 18th.

For more information on how future data releases could affect your currency requirement, call our trading floor 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.