Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just 30 days affecting your AUD return when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
The Australian Dollar had a poor finish to January as the Australian inflation report for December disappointed. With the numbers disappointing the likelihood is that the Reserve Bank of Australia will continue to remain dovish at the next interest rate decision on the 6th. Globally interest rates are being hiked which is pulling investment out of Australia and weakening the Australian Dollar.
Australian Dollar sellers should be wary as the Federal Reserve this week gave a hawkish statement which means it’s likely the FED will raise interest rates in March, which will lead to investors leaving the Aussie and flocking to the US Dollar.
It was a good day for the Pound vs Australian Dollar yesterday as Australian building permits were released. The numbers took a complete tumble and were down 20% compared to the expected 8%. GBPAUD exchange rates increased by 0.75% and on a $200,000 Australian Dollar purchase this cost my clients £850.
At the start of the year the Australian Dollar benefited off the back of a surge in iron ore prices, however in recent weeks the price of iron ore has gradually declined which has made the price of the Australian Dollar decline also. A Report this week by Reuters suggests that Australia are preparing for a steep decline of 20% in iron ore prices throughout 2018. Their reasoning is that the demand from the top importer China will fall. If this is the case I expect this will be tough year for the Australian Dollar against all major currencies including sterling therefore making arrangements may be your best option.
For clients that are buying or selling Australian Dollars and live in Australia a contract option we offer is a limit order. This allows clients to set a pre-determined rate and if we achieve that rate we will buy the currency on your behalf. For more information feel free to call the trading floor.