Are current levels warranted on GBP/AUD?

I feel the Pound is currently drastically undervalued against most major currencies, possibly none so much so as the Australian Dollar.
If we look back to September, 2015 GBP/AUD was sat comfortably above the 2.00 mark at 2.19, It currently sits in the mid 1.60s. A difference of nearly 55 cents and it has been more.

If you are an Australian Dollar seller I would be seriously considering taking advantage of current levels.

The effect of potential rate hikes in the US

The Federal Reserve raised interest rates in December and have indicated there could be as many as three further hikes this year. Trump has recently stated he feels the US dollar is too strong which could make the Fed think twice, but if there are rate hikes in the US this could be detrimental to the Australian Dollar.

The US Dollar will become more attractive to the investor with an increased level of safety and also higher return than previously available. Another factor to take into account is Chinese growth, which although still very impressive, it is not growing at the same pace as previous years. With the Australian economy so heavily reliant on the Chinese buying Australian raw materials and the possibility of a trade tariff being imposed by the US on China this could cause a significant fall in Australian Dollar value.

There has also been mentions in the press that Australia is in serious danger of losing it’s AAA credit rating. Standard and Poor could be the first to make this move. No longer will Australia be a member of the exclusive AAA club which includes Sweden, Singapore, Lichtenstein and Luxembourg. The downgrade could take place before May and this would no doubt cause investors to rethink putting their funds into AUD.

Australian Dollar sellers may wish to take advantage of the highs against Sterling. Call us on 01494 725 353 to see how much we could save you on a transfer.

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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.