Rates for GBPAUD hit a high of 2.0353 this morning before retreating two cents lower. The pound continues to see wild swings against all of the major currencies including the Australian dollar as the coronavirus drives the markets into deep uncertainty. Whilst the pound has fallen dramatically against the euro and US dollar it has made strong gains against the Australian dollar creating some excellent opportunities for those looking to buy Australian dollars.
Those with pending requirements to either buy or sell Australian dollars would be wise to get in touch to discuss your requirement and plan around these unprecedented events.
Why is the Australian dollar performing so badly?
The Australian dollar is losing ground as concerns are rising that the country faces a looming recession as the coronavirus continues to have a very negative impact on the economy. The Reserve Bank of Australia which has traditionally had higher interest rates than the rest of the globe is now expected to cut interest rates lower and pursue its own version of quantitative easing (QE). A 25b basis point cut is expected at the nest meeting as well as like QE. For the moment the US dollar which is seen as a safe haven currency in periods of global uncertainty is attracting cash flows as it is regarded as the safest of the havens.
On Friday the British government announced strong new measures for social distancing closing pubs and clubs but also warned that new measures may need to be introduced if people do not follow the guidance given. The Prime Minister has spoken of making further changes when the pandemic is at the right time.
Expect further significant volatility for the GBP vs AUD pair as development continue to unfold in these uncertain times.
If you’d like to discuss these factors and how they could impact an upcoming currency transfer, feel free to get in touch with me, James Lovick, using the form below.