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, this Australian Dollar Report will look at the factors likely to affect GBP/AUD rate in the coming weeks, the table below shows the difference in AUD you would have achieved when buying £200,000 during the high and low points on Friday of last week.

Currency Pair% ChangeDifference on £200,000
GBP/AUD0.6388%AUD $2140

A question of who has it worst?

The key factors on GBP/AUD this week will be UK politics and Brexit negotiations, both likely to cause an impact. Brexit negotiations begin on Monday and as they progress, the deals that are struck and the quality of those deals will influence GBP/AUD.

The Queens speech is due in Wednesday at which point we will again have a government in place which should provide Sterling with a much needed rally against the Australian dollar.

In May we had seen GBP/AUD hit levels above 1.75 and 1.80 did not seem achievable in the near future. However, the conservative’s fall in the polls and the eventual Brexit result has seen GBP/AUD fall below 1.70. Despite the troubles in the UK, Australia has it’s own problems.

There are ongoing worries with the cost of property prices down under, particularly in the areas that provide high earnings such as Sydney and Melbourne and it does not seem as though the problem will go away. Foreign investors are also a catalyst to this issue, predominately the Chinese willing to pay the over inflated prices pushing Australians further afield.

There is also the slowdown in Chinese growth, although China’s growth is still healthy it is not growing at the same speed as previously and I think a slowdown will continue. Australia are heavily reliant on the Chinese to buy their exports so the drop in growth in China has a knock on effect to the Australian economy. I am of the opinion that once the UK has a firm government in place we will see Stirling have the opportunity to get back on track and move closer to 1.75 again.

RBA Meeting’s Minutes could cause volatility on GBP/AUD

The Reserve Bank of Australia (RBA) meeting takes place in the early hours of tomorrow morning. They are published two weeks after the interest rate decision. They provide an account of policy discussion and also how the committee voted. This can give a real indication of what monetary policy changes can be made in the future and can influence GBP/AUD. Keep a close eye on this event, or if you are not keen to stay up, let your broker know and we can explain the various contract options available to help you take advantage of any fluctuations despite it being outside trading hours.

Thank you for reading today’s AUD report, I would greatly appreciate any feedback you have and would take pleasure in replying personally. I am more than happy to assist you with any of your currency requirements. Feel free to e-mail me here.

 

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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.