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Currency Market News

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Australian Dollar exchange rate overview
06 August 2015

The Australian Dollar has been one of the most volatile examples of currency rates being affected through the economic crisis and its aftermath.


Back in 2008-2013, the Australian economy was initially seen as a safe haven away from the austerity of the UK, Europe and USA, and the cost of its currency appreciated by a staggering 44% against the struggling Pound.


Australia maintained higher interest rates than many economies in that period, which made its currency one of the only places investors could see a good return, sending demand for the Aussie sky high and consequently its price surged too.


In 2010, Australia was already raising its interest rates, while the rest of the world was running QE programmes and near-zero interest rates.


This was of course bad news for Brits looking to relocate down under, with the cost of taking a $500,000 lump sum to start a new life down under, increasing by an eye-watering £150,000 over that 5 year period.


However since 2013 the Aussie has seen a remarkable turnaround. The Australian economy has been struggling, with commodity prices falling and unemployment rising, and the Reserve Bank started to cut interest rates, from 4.75% to 2%, and its currency started to weaken once again.


The value of the Australian Dollar has fallen by 47% since April 2013 against the Pound, and unsurprisingly we are now seeing more British families looking to make the leap and move to Australia. At Currency Index the volume of transfers sent by clients to Australia has increased by 18% in 2015 compared to 2013.


Indeed at the end of July we saw the best rate for Brits buying Australian Dollars since the chaos of the financial markets in 2008.


Last week the Reserve Bank of Australia kept interest rates on hold at 2% and indicated that there would be no further cuts. That sent the Australian Dollar higher again and we might now have seen something of a turnaround in recent trends, so if the Aussie economy is getting back on track then now could be the time to consider fixing an exchange rate if you are sending money to Australia.


A reputable currency broker will be able to offer you a fixed rate of exchange up to a year before your move, to help you avoid unexpected volatility which could make a huge difference to your budget.


The story of the Australian Dollar over the last 6 years demonstrates how much difference the global financial markets can make to British families looking to start a new life abroad, and in particular shows how seemingly irrelevant differences in interest rates can in fact drive enormous changes in the cost of countries’ respective currencies.



























Rate



Cost of $500k



October 2008



2.6



 £192,308



April 2013



1.459



 £342,700



August 2015



2.14



 £233,645



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