With the currency markets moving every two seconds, it can be vitally important to be aware of what is driving the currencies in or out of your favour. The table below shows the difference you would have received when buying £200,000 during the high and low points of the past month.
|Currency Pair||% Change||Difference on £200,000|
The AUD has been one of the main benefactors of Sterling’s recent downfall, with a gain of over five cents during the past few weeks.
The AUD has gathered momentum due to an upturn in economic conditions inside Australia, in particular on the East coast.
The financial hubs of Sydney & Melbourne have started to drive the Australian economy forward again, following the end of the mining boom in Western Australia.
In fact, if you look closely at the figures it is NSW & Victoria which seem to be supporting much of the growth, with the other territories languishing to some extent.
This has in turn driven investor confidence up and the AUD is gaining value against the other major currencies as a result.
The improvement seen for the AUD is even more apparent against Sterling, due to the on-going issues already discussed, facing the UK economy and as such a move back towards 1.60 is certainly not out of the question over the coming week.
Sterling is fighting an uphill battle, with sustainable improvement unlikely under current market conditions. This alongside a run of positive economic data has driven the AUD back under 1.65, where it is now likely to find support.
However, there are reasons for those clients holding the AUD to be cautious. Australian Prime Minister Malcolm Turnball issues that the current housing bubble cannot last forever, with an observation that interest rates have risen for many borrowers.
With Australian household debt rising a change in interest rates could have a serious impact on many households and this in turn could have a negative ripple effect on the economy and in turn the AUD.
As such I would be monitoring market developments extremely closely ahead of any upcoming AUD currency exchanges.
Thank you for reading today’s market report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I would be more than happy to assist you with any of your currency requirements. Feel free to e-mail me here.
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