Sterling vs Australian Dollar rates have finally broken through the support levels of 1.60 and this occurred immediately after the US Federal Reserve’s interest rate decision. Typically when the US raise interest rates this leads to a weakening of the Australian Dollar as it is often seen as a riskier currency. However, last night’s movement highlighted the strength of the economy down under and with the Fed suggesting that another rate hike may be some time away the Press conference led by Janet Yellen saw the Australian Dollar improve dramatically against the Pound.
The Fed went on to say ‘economic activity will expand at a moderate pace’ and as the tone was not overtly hawkish this has led to further Australian Dollar strength.
The Australian economy has been posted some very positive data since the turn of the year and with GBPAUD rates now trading below 1.60 I think we could see further losses for Sterling vs the AUD towards the end of this month. The Pound is clearly under enormous pressure with the lack of clarity behind the triggering of Article 50 and as Australia is removed from the situation between the UK and the European Union I think we’ll see further improvements for the Australian Dollar.
Indeed, early this morning Australian unemployment data was released showing a fall from 5.7% to 5.9% but owing to the Fed’s softer tone in the conference this particular set of data has seemingly been overlooked.
Therefore, if you’re thinking of selling Australian Dollars to buy Sterling it may be worth looking at getting something organised in order to take advantage of these current exchange rates. Owing to the time difference it may be worth looking at placing a Limit Order, which allows you to set a price, which can be achieved out of the usual trading hours.
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