The following report looks at factors that may impact GBPAUD exchange rates. Currently, The Aussie Dollar is at a 3-year high against Sterling.
The rates to buy Sterling from Australian Dollars have hit their best level since October 2013 last week but have just started to weaken over the last few days up until yesterday. The price of Iron ore has increased by as much as 7% as China has recently cut their capacity. The price of the commodity has risen by as much as 36% since the start of the year and this is another reason for the strength of the Australian Dollar.
With Malcolm Turnbull having been elected for another term this has helped to keep the AUD strong against Sterling and I think we could see further gains for the Australian Dollar in the short term whilst the UK struggles both politically and economically.
The Reserve Bank of Australia kept interest rates on hold earlier this month with their next decision not due until 2nd August. The minutes of this month’s meeting are due to be published on Tuesday and any hints of a rate cut round the corner could weaken the AUD early next week vs Sterling.
A potential risk to the Australian Dollar will come overnight when the Chinese release GDP data for the second quarter. The expectation is for 6.6% year on year for the previous quarter and with Chinese Retail Sales expected to show 10% year on year any signs of these data releases coming out strong then we could see Sterling fall further against the Australian Dollar. Therefore, if you’re considering exchanging Australian Dollars to buy Sterling then it may be worth taking advantage of these recent swings.
Want to know what else could impact exchange rates in the days and weeks to come? Our Brokers are available until 6pm today to discuss your options, call 01494 725 353.
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