GBP/AUD exchange rates have once again struggled to hold onto recent gains. Indeed Sterling has dropped by almost 40 cents against AUD since the middle of last year. There is a bit of ying and yang going on at the moment with Pound weakness combined with AUD strength. The RBA have recently confirmed that they will be keeping interest rates on hold for the foreseeable future, which is likely to fuel the property market down under and also mean that foreign investment will continue to be ploughed into the economy.
It is also apparent that the Australian Dollar is being used as a Carry trade at the moment as with interest rates so high compared to that on offer in other western economies until we see any rate change elsewhere including the US I think the Australian Dollar will continue to remain strong against the Pound.
With the value of commodities continuing to rise although we have seen a drop of mining investment the economy is being supported by the Chinese’s appetite for raw materials.
On Wednesday the Chinese release manufacturing data and the Australian Commodity Index is due out and I think if both come out positively we could see Sterling vs the Australian Dollar potentially fall below 1.60 on the Interbank level.
Trump’s previous proposal to impose a 20% tariff on Chinese goods entering the US appears to have been forgotten about and as such this has kept Chinese demand strong down under.
Australian Trade Surplus is at a record high and both business and consumer confidence have picked up. With Australian GDP data due out on Wednesday I think this could be the trigger point to send Pound to Australian Dollars in a negative direction. The expectation is for 1.9% growth year on year.
Therefore, if you’re thinking of selling Australian Dollars to buy Sterling it may be worth looking at getting something organised in order to take advantage of these current exchange rates. Owing to the time difference it may be worth looking at placing a Limit Order, which allows you to set a price that can be achieved out of the usual trading hours. Email me at email@example.com if youd like to learn more about a Limit Order.
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