This AUD update examines factors that could affect Australian Dollar exchange rates, whilst the table below shows high to low GBP/AUD rate movement and the difference when exchanging £200,000 to Australian Dollar over the last 30 days:
|Currency Pair||% Change||Difference on £200,000|
Since the end of August the Pound has been making substantial inroads against the Australian Dollar. Exchange rates have increased from 1.62 to 1.77. On a £200,000 currency transfer clients are now receiving an additional AU $30,000. The increase in exchange rates comes from a period of Sterling strength coupled with a period of Australian Dollar weakness. The Pound has been making inroads due to the positive news coming from Brexit negotiations.
By all accounts the EU have welcomed Theresa May’s offer of €50bn as a divorce settlement and later this month we should know if the UK and EU will start trade negotiations early next year.
Australia made history last month and became the longest country to avoid recession therefore you would think the Australian economy is in good shape. However, the Australian Dollar is devaluing by the week which some of my clients can't understand.
There are a few key reasons for this. Iron Ore, Australia's largest export has been plummeting in value recently due to less demand from China. The Reserve Bank of Australia continue to state there is no plan to raise interest rates anytime soon, the US Dollar is strengthening at the moment and currency speculators are selling off their Australian Dollars to buy US Dollars.
I’m expecting the Australian Dollar to continue to lose value against Sterling this week, therefore if you are selling Australian Dollars to buy Sterling the safe option may be to trade today. The reason I believe the Pound will make further gains against the Australian Dollar, is I expect the Pound to strengthen off the back of the Brexit discussions today and as Donald Trump's tax cut plans have been approved over the weekend, I expect to see further sell off of Australian Dollars to buy US Dollars.
For more information on factors likely to affect ecxchange rates in the short term, call our trading floor on 01494 725 353 or email me here.