This morning the Sterling to Australian Dollar exchange rate has fallen just below the 1.70 level following an improvement on the expected Home Loans data that was released in the early hours this morning. There was only expected to be an improvement of 0.5% however the data came in showing a 1.0% increase for August.

Will the GBP/AUD rate rise?

Over the course of the next few months the GBP/AUD exchange rate is likely to be dictated by US economics and the strength of Sterling. The US look set to raise interest rates which will provide investors with the same returns from an interest perspective as they would have in Australian Dollars. Since the US Dollar is considered a much safer place to invest we could well see a lot of movement from the Australian Dollar to US Dollar essentially releasing a large amount of AUD strength at the end of 2017.

What this does suggest is that anyone looking to purchase Australian Dollars maybe inclined to wait until the start of December to complete an exchange. Even if there was only a movement of 3% in your favour that would take the level above the 1.75 and on the way towards 1.80.

The data and recent shifts suggest a large movement could be on the cards. Even though Sterling has struggled against other currencies in the last few weeks there has been near 3 month highs for the GBP/AUD rate.

This should be considered as a stark warning to Australian Dollar sellers who are maybe waiting for the rate to return to the 1.60 level. The 1.70 mark at the moment could well become the desired level in a few months’ time. Waiting for a movement in your favour looks as though that may result in losses if you consider the trends for the last few weeks.