This report discusses the implications of a Brexit on the Aussie Dollar.

Sterling’s troubles boost the Aussie Dollar

Yesterday, AUDGBP rates gained nearly 4 cents following the news that the Bank of England is likely to cut its interest rate in the summer, with 2% swings from the day high to the day low from 1.81 to 1.77.

It is not just the UK that is likely to feel the effects from the Brexit, as the global risk appetite has increased, investors will be less willing to invest in riskier currencies such as the Australian dollar.

The Australian election this weekend could provide some respite for clients looking to buy Australian dollars. Political uncertainty is one of the key drivers for market volatility and could create weakness for the AUD. However, the uncertainty surrounding the Brexit is still likely to weigh heavily on the pound. As a result, I expect the GBPAUD rate to be 1.80-1.85 by the beginning of next week. Rates haven’t been seen at these levels for people selling their AUD for nearly 2 years, if I was selling my AUD to buy foreign currency I would be extremely tempted to take advantage of current levels.

Australian dollar predictions

As implications from the Brexit unfold, such as the effects on global trade with America and therefore China, Australia is likely to be effected by this. This combined with the effects of the election and further possible rate cuts to protect the economy from the effects of the Brexit, I predict the Australian dollar to be testing the 2 mark in the coming months.

This time last year the GBPAUD exchange rate was over the 2.10 mark, therefore clients with Aussies to sell may want to take advantage of the current levels, before the volatility sets in. Our team here at currencies.co.uk can help to eliminate the volatility through a forward contract, securing todays attractive levels for up to a year in advance with a small deposit. Speak to one of our team to find out more.

Have any questions relating to the aftermath of Brexit? Speak to our dealers today on 01494 725 353 to discuss your needs.

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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.