Aussie currency after UK Brexit
29 June 2016 by News DeskFinancial markets have seen fluctuations since the Brexit result and Aussie currency has not been immune to the uncertainty.
Aussie currency specialists TorFX, a leading foreign exchange company, has a good handle on current events in the markets and provides guidance for those wanting to buy or sell dollars.
The company says that while the UK vote sent the Australian Dollar surging against a broadly bearish Pound (with the AUD/GBP exchange rate rallying from 0.5074 to 0.5623) the ‘Aussie’ has also been feeling the pressure.
Given the Australian Dollar’s position as a risk-correlated asset, the spike in risk-off attitude immediately following the announcement of the referendum result saw AUD drop significantly against peers like the US Dollar (AUD/USD fell from 0.7639 to 0.7327) and the Japanese Yen (AUD/JPY plummeted from 81.39 to 74.42).
Meanwhile, the Pound to Australian Dollar exchange rate careened from 1.97 to 1.77 – hitting a multi-year low. The US Dollar to Australian Dollar exchange rate advanced from 1.3089 to 1.3648 in response to the uncertainty.
Aussie currency after UK Brexit
Although the UK’s Brexit could delay the next interest rate increase from the Federal Reserve, a circumstance which would usually bolster the ‘Aussie’, demand for safe-haven assets and concerns that turmoil in global markets could prompt an interest rate cut from the Australian Dollar are likely to keep the currency under pressure against the US Dollar in the short to medium term.
The Australian Dollar is expected to remain trending higher against the Pound however until the long term ramifications of the UK’s break from the EU become known.
For UK nationals and UK expats with international money transfer requirements, latest market shifts will be a cause for concern despite the Bank of England saying it was prepared for the outcome and will take action to stabilise the currency market if required.
Anyone concerned about upcoming currency transfers at this time may wish to get in touch with their foreign exchange provider and discuss their options. For detailed one-to-one help with Aussie currency and other foreign exchange contact TorFX
Currency Markets after UK Brexit
The UK’s decision to leave the EU has impacted Aussie currency and sent shock waves across Britain and the wider world.
The reaction in financial markets straight after the vote was immediate and dramatic with shares crashing and the Pound (GBP) plummeting to a 30 year low against the US Dollar.
GBP/EUR also dropped from a previous high of 1.31 to a low of 1.20 before stabilising slightly at 1.24.
While some international currency brokers suspended trading ahead of the vote, others worked through the upheaval. TorFX reported record levels of trading activity.
TorFX Managing Director Nigel Fox said; ‘We saw unprecedented levels of trading activity and had spoken to hundreds of clients even before breakfast! We have extended our opening hours to help as many clients as possible steer a steady course through these volatile waters.”
Prime Minister David Cameron’s resignation was another shock to the system, although the news that Article 50 (which would have resulted in the UK’s immediate exit from the EU) won’t be enacted did calm the situation slightly.
TorFX analyst Josh Ferry Woodard proved pretty spot-on in his pre-vote forecast for Pound exchange rates when he stated:
‘The Pound could fall towards 1.20 in the immediate aftermath of the referendum if Britons vote to leave the bloc, and analysts warn that GBP/EUR could slide to parity by the end of the year following a potential ‘Brexit’. In the longer term, ‘Brexit’ would likely put pressure on the single currency if it fanned the flames of discontent on the continent and boosted support for splinter groups in other nations, such as Germany, Greece, Holland, Italy, Spain and Portugal.’
He continued; ‘Brexit’ could potentially throw the Euro back into an existential crisis, unleashing an awesome wave of uncertainty that could easily cause the Euro to crash land over the next year or so. The repercussions for GBP/USD following the vote are extreme: if Britain elects to leave the EU then the Pound is expected to devalue towards 1.35 and potentially a 30-year low of 1.30.’
Contact TorFX: www.torfx.com
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