Pure FX Blog

10 May 2013

Sterling Reaches Highest Point Against Australian Dollar Since Jan 8th

by Peter Lavelle

Sterling leaps ahead!

The pound has reached its highest point against the Australian dollar since January 8th today, or 17 weeks, at 1.5363.

By comparison, sterling was at just 1.4381 against the Aussie on March 12th. Hence, it’s since climbed +6.83%, or almost 10 cents.

A £250,000 transfer would hence be worth $24,450 more today than on March 12th.

(Please bear in mind, these are the interbank rates at the time of writing. This means the exchange rate may have changed since then.)

Sterling could continue to climb against the Aussie

Moreover, looking ahead, the pound could keep rising against the Australian dollar. This is because:

1. Imre Speizer, a strategist at Westpac Banking Corp, thinks that “The RBA will continue cutting the cash rate into early next year down to 2%.”

This could bring down the Aussie, because the lower the cash rate (or interest rate), the less profitable the currency is to investors.

2. Stanley Druckenmiller, a famous hedge fund manager, said yesterday that “We think the Australian dollar will come down and will come down hard.”

This could see the Aussie fall, because it suggests the currency is overvalued, and due to decline.

Therefore, sterling could continue to rise against the Australian dollar!

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