Peter Lavelle - 9.03.2012
In this week's article about changing currencies when you move to Australia, I'm going to discuss finding the best time to change pounds into Australian dollars.
The first thing you should do to find the best time is to look at the present range in which the UK pound and Australian dollar are trading.
For instance, in the past month the pound has moved inside a 2.5 cent range against its antipode rival, between about 1.4650 and 1.490.
This means that, if you are planning to change UK pounds into Australian dollars in the near future, these are the kind of rates you can expect.
If on the other hand you're prepared to wait some months, then obviously that range might change. (Although in all likelihood for the worse: back in January 1.00 pound got you 1.51 Australian dollars, which means it has since weakened.)
Once you've established the range in which the pound to Australian dollar is trading, it's then a matter of figuring out when the rate will hit the top of that range, and whether it's worth waiting given that it's quite possible it could also decline.
In short, this means looking at what might influence the pound to Australian dollar exchange rate in the near future, and deciding if it'll benefit you.
For instance, yesterday the Bank of England held interest rates at 0.25% in the UK, signalling that it believes the UK economy in poor shape.
The pound has since lost ground following this announcement. You need to look at what's coming up, and decide if this will benefit the pound to Australian dollar or not.
It's important to tell you that it's all but impossible to predict the rates. There are so many countless people trading on the foreign exchange market, and so many countless economic and political factors at play at any one time, that knowing whether the pound is going up against the Australian dollar is less a skill than luck.
But of course, there are tools you can use to help you do this.
For instance, send me an email and I'll watch the rates on your behalf, getting in touch only when the pound to Australian dollar exchange rates reaches your preferred target. This removes a lot of the challenge of finding the best time to change currencies.
I will return with my next article helping you to change currencies next week.
Peter Lavelle at Pure FX