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You are here: Home / Australian Dollar / GBP/AUD has lost a cent this week, will the losing streak continue?

GBP/AUD has lost a cent this week, will the losing streak continue?

October 12, 2016 by Joe Wright

GBP/AUD has lost a cent this week, will the losing streak continue?

aussie dollar interest rateThe Pound is currently out of demand from investors with the outlook for the UK economy looking quite bleak at the moment.

Despite some benefits to the UK economy in recent months due to the already weakened Pound, sentiment towards Sterling in the upcoming months and years is negative at present, and this is being reflected within exchange rates as we’re currently around 3-5 year lows generally across the board when comparing GBP with other pairs, and if you’re concerned with the US Dollar it’s a 31 year low.

The benefits to the Pound mentioned in my previous paragraph allude to improved tourism, exports and manufacturing figures as the weaker Pound has created demand for business with the UK.

But whilst the weaker Pound is good news for UK exporters, those in the process of buying a property abroad for example are seeing that home become more expensive on almost a daily basis at the moment, and according to many analysts/economists we could see the Pound soften further over the coming months.

The pound hasn’t quite fallen as steeply against the Aussie Dollar as it has against some of the other major currencies, and with that being said HSBC have recently stated that they expect the GBP/EUR exchange rate to drop to levels of around parity which equates to another 9% more or less from the current levels.

Those hoping for the Pound to improve should be aware of these forecasts as many were suggesting the possibility of these falls prior to the Brexit vote, with them becoming a reality as the Brexit talks begin.

Moving forward I expect to see the Pound come under continuous pressure mostly due to the poor sentiment surrounding the UK’s future, and this week there is little in the way of economic data releases so expect sentiment to drive the GBP/AUD pair this week.

Filed Under: Australian Dollar

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About Joe Wright

Joseph Wright brings a wealth of experience on the currency markets. He has worked in a number leading financial services organisations over the last seven years - working within a range of products including foreign currency exchange, equities and derivatives.

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