Sterling exchange rates up against the AUD, NZD & ZAR but how long will it continue.

GBP EUR Looks to Employment Figures for Support

We have witnessed a good turnaround of fortune against the southern hemisphere currencies of late. Over the last month or so the pound has risen from lows of 1.4751 to 1.6357 against the Aussie Dollar, 1.8536 to 2.0584 against the Kiwi Dollar and 10.1850 to 12.828 against the SA Rand.

In times of global uncertainty which we are currently experiencing, the southern hemisphere currencies as a rule of thumb tend to weaken as investors will move away from these riskier currencies. They unwind their positions on carry trades and at present we are seeing a flight to safety benefit the USD. Although the uncertainty weakens these currencies you always have to look at what is happening over here in the UK. With tomorrows GDP announcement for the UK and the interest rate decision on Thursday where QE has been brought up again the trend of strength for the pound could be halted quite sharply.

There has been a lot of downward pressure on the Aussie Dollar of late with it weakening against a range of currencies but most notably for us verses the pound and USD. Downunder they had an eagerly awaited interest rate decision today where the Reserve bank of Australia kept rates on hold at 4.75. Interest rates are key to a countries exchange rate and recent rumours of a rate cut in Australia has assisted the currency in weakening further. Over the coming months if we do see a rate cut and further turmoil in Europe then we could see the pound push back near to the 1.70 level. Please bear in mind that this is only a prediction and if interest rates continue to stay at current levels or rise then just be cautious as the pound could slip back to levels over the last few weeks. The gain against the Aussie Dollar has been just under 10% and if you were emigrating then that would save you nearly £20K on a £200K purchase.

If you would like to discuss any currency exchanges that you need to carry out over the coming weeks or months please feel free to email me at [email protected] with your name, number and enquiry and I will call you to discuss the service that we provide and see if we can help make you a saving on your exchange.