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GBP’s Bright Start to the Year Is a Distant Memory

The British pound was the worst-performing major currency in the April-June period and remains “impossible to forecast” amid a Tory leadership battle that might force "no deal” or a general election.

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The British pound’s bright start to the year is a distant memory.

Sterling began 2019 in great form, with gains against the US dollar and euro exceeding 5 percent between January and mid-March, and 4 percent against the Australian dollar. Since then, the pound has given back all of those gains and, with the last business day of the quarter now in the record books, is officially Q2’s worst-performing major currency, by some margin.

Amundi Asset Management’s Andreas Koenig told Bloomberg this weekend that Britain’s currency is now “impossible to forecast,” but clearly sentiment has worsened, with Leave-supporting Boris Johnson seemingly a shoo-in to win the Tory leadership race and consequently to become Britain’s next prime minister. A Johnson premiership would raise the probabilities for both no-deal and a 2019 general election, political analysts have said.

AUD to GBP - 3 month chart - Latest
AUD/GBP - 3 month Chart - Latest

The pound’s unfortunate position is, of course, to the benefit of all other major currencies, including the Aussie dollar, which rallied on Friday to a 4-month high of £0.553. The New Zealand dollar achieved the same, at £0.529, and the euro did even better with its quote of £0.899 — the highest in 5 months. At £0.788, the world’s reserve currency, the US dollar, is close to its average rate over the past month.

In all cases, the pound is unlikely to receive much in the way of respite until November, when hopefully the UK-EU Brexit arrangement, or lack thereof, is known (Boris Johnson insists that the UK will not seek any further Article 50 extensions beyond the October-31 deadline).

A number of reputable sources, including the Bank of England, have predicted a sterling collapse in the event of no-deal. Per HSBC’s GBP forecasts, no-deal is likely to send USD/GBP and AUD/GBP soaring towards or beyond £0.9 and £0.6 respectively.


Further Reading


AUD/GBP Between a Rock and a Hard Place – USD Strength


Both the Australian dollar and British pound sterling have had a hard time of late caught between the rock of the China/US trade war and the Brexit hard place.

Last update: 27 Aug, 2019

Australia Cuts Interest Rates to Record Low

RBA Australian dollar AUD currency news and forecasts

The RBA has cut Australian interest rates to a record low of 1 percent in an effort to boost inflation. The Australian dollar is slightly stronger following the widely expected decision but is expected to lose 5–7 percent of its value before year-end.

Last update: 14 Aug, 2019

Australians Swerve Thai Holidays with Exchange Rates in the Gutter

With AUD-THB at a 10-year low, Australians travelling this year to Thailand’s wildly popular resorts are facing holiday costs 50 percent higher than those paid in 2012. With exchange rates as they are, those in Oz are choosing better-value destinations.

Last update: 23 Jun, 2019


Posted to: News

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

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