During yesterday’s trading session, GBP/AUD fell to its lowest level since late 2013, this week breaking through the 1.70 threshold into rates of 1.68. This has provided clients with the best time to sell Australian Dollars in over 2 and a half years. The main reason for this is predominantly due to the Bank of England’s (BoE) and Reserve Bank of Australia’s (RBA) recent monetary policy changes. The BoE cut Interest Rates for the first time since 2009 to record lows of 0.25%, and the RBA also cut Interest Rates in May and August to 1.5%.
Higher Interest Rates are more appealing to Investors as the returns are greater, so Investors selling their Pounds for Australian Dollars will now see a 1.25% return on their funds. I would expect to see further Australian Dollar strength over the coming months – with the UK facing severe problems since the Brexit vote in June, combined with insignificant Interest Rates and further Quantitative Easing being introduced to try and stimulate the economy, I feel the Australian Dollar will continue to be the more attractive option for Investors. Last night the Reserve Bank of New Zealand announced a cut in interest rates from 2.25% to 2%. This temporarily caused investors to move their funds out of Australian Dollars into the New Zealand Dollar, but the gains were quickly undone and we start this morning’s trading only slightly above the rates seen at the end of yesterday.
On Tuesday the RBA will release the minutes following from their Interest Rate decision two weeks ago, followed by Unemployment data on Thursday which has been showing positive signs of late. Either of these releases have the capacity to cause further AUD strength if they follow their positive trends. Since the Referendum result, an AUD150,000 property purchase has become around £12,500 more expensive, so I would urge any clients with a pending AUD requirement to get in touch with their broker here at currencies.co.uk to secure the current rate of exchange and avoid any further potential losses.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353.
First class foreign currency provider, great rates and outstanding customer service.
Great service very professional but with a personal touch. Everything went smoothly with no fuss. Would highly recommend.
It was really refreshing to go through a process that had absolutely no hiccups at all, the service that we were offered exceeded our expectations. We would unreservedly recommend the company to anyone seeking to exchange currency.
Very efficient service. I’ve never used a service like this before & was purchasing a house in France. It was all explained very well & I was kept informed all along the process. Putting a deposit down to pre-book the rate also saved us a fortune.