Once more data from the other side of the world has given the Australian Dollar a leg up against the competition.
As markets opened this morning the Aussie was up against the Pound and the USD, with strong Australian growth couple with a second successive positive surprise emerging from China in just two weeks.
Positive growth for the Australian Dollar was expected for quarter four, after a third quarter which had actually recorded a contraction. But this consensus among analysts of 0.7% for Quarter 4 of 2016, once all the statistics were tallied, was blown out of the water.
Instead the Australian economy grew by 1.1% in a single quarter. The improvement may not sound incredible, but each 10th of a percent represents billions in revenue. This is also fantastic in relative terms given that the UK economy is flirting with growth forecasts of around 2% for the whole of this year.
This positive view of the Australian economy was given a helping hand by optimistic Chinese business confidence data, painting the picture of a very active and hungry market for Australian goods.
GBP/AUD has seen resistance levels at 1.60 multiple times since the Referendum, with only a brief stint in October seeing the pair dip its toe below that mark, and even then only for a very short period.
Commonly termed a resistance level, this is a psychological point where most traders will seek to consolidate their profits from a stronger Dollar by buying up a relatively cheaper Pound. Given that the market has been here multiple times before without further progress, most are unwilling to gamble on further gains, and when massive amounts of Sterling is bought up, the pairing is balanced out – explaining the 1.6-1.7 band we have been moored in for some time.
Even with these fantastic results, the Australian Dollar has only made marginal inroads against the Pound, and, as such it seems unlikely for further gains to be recorded. In my opinion anyone holding AUD would be wise to secure these gains and convert to Sterling. Those who have gambled on further progress have been disappointed and lost out on multi-year highs three times since October.
Buying the Australian Dollar may become more expensive this week, so get in touch with us on 01494 725 353 if youre looking to make a transfer in the coming days.
Would not hesitate to use again, Joshua from FCD looked after us very well and we were able to get a good rate of exchange, the whole process was very quick and painless.
This was a faultless service from start to finish. Our contact, Joshua, could not have been more professional and efficient. He guided us excellently through all the stages of transferring money to the UK. Joshua even managed to get us the best exchange rate available at the time, and he did this with a pleasant manner and exceptional politeness.