This AUD report will address the factors that are likely to affect exchange rates in the coming weeks if you are buying abroad or making a currency transfer. The below table shows the difference in AUD you would have achieved when buying £200,000.00 during the high and low points over the past 30 days.

Currency Pair% ChangeDifference on £200,000
GBP/AUD3.25%AUD $10,520
Interest rates stay on hold for the 20th month

Is a decline in Australian Dollar exchange rates on the horizon?

Earlier in the week the Australian dollar made ground against most of the major currencies due to the US President’s controversial decision to fire chief strategist Steve Bannon. In recent weeks. there has been a direct correlation between Donald Trump’s actions and the strength of the Australian dollar. It appears Trumps outlandish comments benefit the Australian dollar.

The National Australian Bank this week have decided to increase Australian dollar exchange rate forecasts as they now believe the prospect of the US dollar recovering this year has diminished. They do not expect to see a major sell off of Australian dollars towards the end of the year.

The National Australian Bank are now predicting by the end of the year that AUDUSD exchange rates to be 0.75 up 0.5 from 0.70 and AUDGBP to be 0.59 (1.6950) up 0.4 from 0.55 (1.8181).

Last month the Reserve Bank of Australia issued a warning that an overvalued Australian dollar could have a negative impact long term on GDP numbers, inflation and that jobs would be at risk. If the NAB predictions are correct I expect the Governor of the Reserve Bank of Australia Philip Lowe to have a busy few months continuously trying to talk down the currency, which is also known as jawboning.

Is now the time to sell Australian to buy pounds?

Before the referendum vote over a year ago GBPAUD exchange rates were 35 cents higher and Australian dollar sellers were hoping a story would break which would provide them with a window of opportunity. It is safe to say the UK’s decision to leave the EU has provided that opportunity.

Even though commentary from Brexit negotiations do not look promising at present I expect the UK and EU will come to an agreement that benefits both parties next year, which should in turn strengthen the pound. Couple this with US interest rates moving above Australian dollar interest rates, which for the readers reference the National Australian Bank predicts, I am of the feeling in the upcoming year the pound will start to recover against the Australian dollar.

If Australian dollar sellers lose their 35 cent gain a 400,000 Australian dollar conversion into sterling would generate them £45,000 less!

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