Since the UK left the EU GBP/AUD exchange rates have dropped 30 cents. If you sell 200,000 Australian Dollars now compared to before the EU vote you will now receive an extra £17,500! Major economic events have unfolded since the UK public decided the fate of the UK in regards to EU membership.
Both the Reserve Bank of Australia and Bank of England have cut their interest rates by 0.25%. Many of my clients do not understand why GBP/AUD hardly fluctuated when the RBA cut interest rates however when the Bank of England cut rates GBP/AUD exchange rates plummeted.
The answer to the question is that it was common knowledge the RBA were going to cut rates but speculators were unsure whether the cut would be by 0.25% or 0.5%. As rates were only cut by 0.25% the market didn’t react. As for the UKs decision I believe it was a 50-50 chance whether the Bank of England were going to cut rates therefore it was a shock to the market when rates were cut to record lows.
Looking ahead the next RBA interest rate decision is set to be released on the 6th of September. As there was speculation at the last meet that rates could be cut by 0.5% there’s a chance we could see another cut by 0.25%. If this is the case I expect sterling would make gains against the Australian dollar.
If you are selling Australian Dollars in the near future I would recommend getting in touch with one of our experienced brokers. It would be a shame if the 30 cent gains you have made were lost as you are not kept up to date with the latest new and market movements.
GBPAUD exchange rates have recovered from some of the lows of the Brexit vote, you may want to get in touch with us to discuss an Aussie Dollar transfer. Call us today on 01494 725 353.
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