Overnight we’ve seen the GBP/AUD exchange rate hit a 4-month high, after the pair hit a high of 1.8361 in the early hours this morning.
For those of our readers planning on making currency exchanges involving the Pound and Aussie Dollar, it’s worth noting that the current rate is also around the highest levels since June of 2016 when the Brexit vote actually took place, making it an attractive time to make the exchange based on recent historical levels. The annual low is 1.6685 to put things into perspective, with the pair dropping as low as 1.59 at their lowest stage since June of 2016.
The boost to GBP/AUD was mostly driven by Sterling strength, after some cautious comments from the European Union’s Brexit negotiator, Michel Barnier. He stated yesterday ‘I think that if we are realistic, we are able to reach an agreement on the first stage of the negotiation, which is the Brexit treaty, within six or eight weeks’. He also stated that he thinks a deal can be arranged before the beginning on November and I would expect any similar positive commentary to result in a boost to the Pounds value.
A major sticking point for the UK is the Northern Irish Border, and it will remain an issue for the Pound as it’s one of the major stumbling blocks for Brexit progress. If there is a breakthrough and the markets receive the news well, I would expect to see a steep climb for the Pound.
The concerns surrounding the US-China talks have also weighed on the Aussie Dollar’s value at the same time of Sterling strength, and this has exacerbated the gains for Sterling hence the 4-month high. The Australian Dollar has also been weakening throughout the year after the aggressive monetary policy adopted by the US Fed. The USD now offers a higher rate of interest than the Aussie Dollar and this has caused the AUD to lose attractiveness as a currency to hold funds in.
Later in the week there will be an Interest Rate decision from the Bank of England, and although no change is expected any hints of future plans afterwards are likely to impact the GBP to AUD rate.
If you’d like to discuss the above factors or have an upcoming transfer involving AUD feel free to get in touch using firstname.lastname@example.org, I’ll be happy to get back in touch personally.