This AUD forecast looks at the cost of converting Pounds to Australian Dollars this week and the factors that could affect your currency transfer. The below table shows the market movements for the GBP/AUD rate on Friday 23rd March.
|Currency Pair||% Change||Difference on £200,000|
1.80 has been a resistance point on GBP/AUD for some time, with it quickly retracting every time this level was breached.
This was due to the news a transition deal was reached regarding Brexit which grants Britain access to the single market until the official exit date is reached.
There was also some very positive data from average wage growth and retail sales which means there is now a higher probability of a rate hike from the Bank of England in May.
The situation was compounded by a fall in iron ore price. Iron ore is Australia’s primary export and it’s most lucrative commodity, largely bought by the Chinese. Unfortunately, Iron ore prices saw steep losses due to a weaker demand for iron ore and steel in China.
I am of the opinion, bar any shocking news regarding Brexit GBP/AUD will remain above 1.80 and we are now seeing new buoyancy levels. I would expect 1.85 as the new resistance point.
I think there is the possibility of further losses for the Aussie. Concerns over average wage growth down under is holding back a rate hike by the Reserve Bank of Australia. (RBA)
I think there is little chance of a hike by the RBA until at least 2019. This is a big issue for the Aussie as it has been a currency of choice for investors. With the US now offering higher returns at 1.75% following the Federal Reserve rate hike last week the Australian Dollar looks far less attractive.
There is also expected to be as many as two further rate hikes from the Federal Reserve by the end of the year, also keep in mind that the US dollar is considered a safe haven. The US Dollar is now a far more attractive currency than the Australian Dollar and Aussie sellers should be taking this into consideration if they are holding on for an Aussie improvement.
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