As Australia faces the ignominy of failing to win an Ashes series for the third time in a row their currency is going a similar way to their cricket team as Australian Dollar (AUD) fell to a fresh three-year low on Monday.
The English weather put a final dampener on Australian hopes of regaining the urn as their currency echoed the efforts of their cricketers with AUD hitting 1.7230 against sterling.
It’s more bad news for Australia but for Brits headed Down Under for the next round of the Ashes in November, things are looking good as fans are set to save 10 per cent on ticket and consumer good prices compared to those who travelled two years ago: “The Aussie dollar still looks soft and expected to weaken further.” commented Phil McHugh, senior analyst at Currencies Direct.
Since the financial crisis, the Australian dollar has been the strongest performer of the major currencies supported by demand from China and interest rates that maintained normal levels when compared to Europe, the US and the UK. However, in its August policy meeting yesterday the Reserve Bank of Australia (RBA) announced plans to cut interest rates to a record low, a quarter point to 2.5 per cent, bringing this easing cycle to 225 basis points spread over 21 months.
“The Aussie dollar’s good run has recently run out of steam – a bit like its cricket team. Looking ahead the AUD looks set for further selling pressure with slowing demand from China and falling interest rates removing the appetite to hold AUD moving forward. This is the second time this year that the RBA has cut interest rates, and rates are only expected to fall further which puts further pressure on the AUD.
“The retreating AUD is an extra boon for the Barmy Army fans looking to head back to Australia later in the year for the next Ashes series with the expectations of a further scalp” commented McHugh.
For those looking for a longer stay, there is a silver lining for Aussies looking to repatriate to Australia as the AUD has seen a 16 per cent decrease since March this year, and currently stands at its lowest rate in over three years. As such, it appears a good time for Aussies to follow their cricket team back home.
Specialist FX brokers such as Currencies Direct, can lock in the best possible value on the AUD, beating rates offered by high street banks by up to 6 per cent.
“The AUD has weakened 16 per cent over the past four months when GBP/AUD traded down as low as 1.45. We are currently sitting at 1.7250 and the highest level since August 2010. The current levels reflect a good level to start looking at planning a purchase of AUD for those seeking to emigrate or for Australians based in London looking to head home.”
Australia’s economy is now expected to grow 2.5% in the fiscal year through June 2014, below the 2.75% level the government had forecast as recently as May keeping the AUD down, so hopes remain low for Australian cricket and currencies, but should raise a wry smile for England fans.