Why has the Pound been gaining value?

Those holding Sterling and waiting for the right time to exchange them into Aussie Dollars have been dealt a favourable hand recently, as over the past month and particularly over the past week the currency has gone from strength to strength.

The impetus driving these upward movements have been three key economic news releases in the UK which anyone with a Sterling based currency requirement should be aware of. Surveys carried out by economic data company, Markit, have shown that business confidence in the UK has shown a steep turnaround in the space of a month, demonstrating that the UK economy isn’t performing in the terrible fashion we were warned it would.

Whilst confidence in the construction sector beat estimates the improvement in manufacturing outlook has improved by the biggest level in a quarter of a century, whilst the services sector posted its biggest gain on record. The improvement in sentiment towards the services sector is perhaps the most significant as the sector makes up 80% of the UK economy.

How does this effect my currency exchange?

I think those planning on converting their Pounds for Aussie Dollars will need to put last year’s exchange rates to the back of their minds I personally I cannot envision the exchange rates hitting the 2.00 level for some time. The 7 cent gain for the Pound may well be worth taking advantage of, particularly on larger deals as a return to disappointing data could see the Pounds gains scuppered quickly, investors are likely to react quickly to weaker economic news out of the UK due to its new trading conditions and planned removal from the EU, as it’s a move financial markets were originally hoping wouldn’t happen.