This GBP/AUD update examines factors that could affect exchange rates in the short term, the table below shows the difference in AUD you would have achieved when buying £200,000 during the high and low points over the past month.

Commodity currencies like the AUD could suffer if global growth starts to slow

The Pound has made a move towards 1.70 but with the AUD finding support around this key resistance level, clients will be asking themselves whether a trade price above this level is likely over the coming days?

The Pound gained almost two cents towards the latter part of last week but looking forward I think it unlikely that a similar move will be made this week.

The Pound hit a high of 1.6960 this morning, with this positive move bringing some much-needed respite to those clients holding Sterling, after watching its value decrease over recent weeks. A combination of the disastrous election results as far as market perception was concerned and the on-going uncertainty surrounding Brexit negotiations, has dragged the Pound’s value down and investor’s risk appetite shrunk alongside the UK’s economic growth forecasts.

For those clients holding the AUD, I feel it is unlikely that we will see a spike towards 1.65 and the current market unpredictability means any exposed positions could be hit hard by a change in market sentiment.

Being a commodity based currency the AUD relies heavily on global growth remaining strong and whilst the current climate is pushing investors towards the AUD and its higher yielding interest rates, any slowdown in its export sector will hit the Australian economy hard and the AUD will almost certainly suffer as a result.

A strong AUD relies heavily on the export of Australia’s vast supply of raw materials to China, so any clients looking to buy or sell AUD should have a strong interest in Australia’s monthly trade balance figures.

Whilst so much instability remains, those clients holding both currencies need to ask themselves whether they are prepared to risk further losses, in order to make any gains.

For more information on how future data releases could affect your AUD requirement, call our trading floor on 01494 725 353 or email me here.

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.