The Pound to Australian dollar exchange rate fell by over 2% yesterday following the Bank of England’s interest rate decision and subsequent monetary policy. Although the bank remained neutral in its stance and even upgraded the UK’s growth forecast to 2% for 2017, the Pound appeared to be sold off in quick succession following this news.
The initial reports as to why this happened is that investors were hoping for an indication that interest rates would be raised towards the end of the year, however there was no such mention and a unwinding of the Pound in the form of profit taking ensued, thus weakening the Pound.
Although the Australian dollar is currently performing well against the Pound, the landscape could very quickly change. If you’re looking at buying GBP with AUD, it may be wise to look at doing so sooner rather than later. The reasoning behind this, Trump.
Reports have emerged that President Trump called the conversation the worst by far of his calls with world leaders that and called the proposed deal ‘dumb’ on his twitter account. Although this isn’t a trade deal, it could spell trouble for future US Australian relations. This could spell Australian Dollar weakness in the months to come if trade relations become under pressure, as explained in my Euro section. We have a number of contract options here that can help to limit your exposure to upcoming weakness, as the team about our forward contracts to keep you protected.
There is no data of any significance today to be released for Australia. This afternoon we could see AUD strengthen against Sterling marginally as investors will look to unwind their positions ready for the weekend.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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