August has come with an increase in the pound to Australian dollar exchange rate. So if you are looking to convert your money to Aussie dollars the time is ripe. Scroll down to read what economics writer Peter Lavelle says.
It's been another great week for the pound to Australian dollar exchange rate. The pound has not just held but in fact gained ground against its antipodean rival as global financial tensions continue to rock the markets.
Take for instance the Eurozone. Concerns that both Spain and Italy could succumb to debt problems forced the European Central Bank to intervene last week. The bank took to purchasing bonds to prevent a crisis identical to Ireland and Portugal. Nonetheless tensions remain high.
In the US meanwhile the spectre of a double dip recession continues to loom over things.
In this climate the markets have hence become nervous and prefer to invest in safe locations. This includes Britain - the deficit reduction plan makes the UK look stable next to Europe - hence explaining the pound's gain.
Was August 5 2011 the black Friday with the Australian sharemarket losing about 55 billion dollars? Is the general financial crisis hitting Aussie shores?
The Reserve Bank believes the growth for 2011 will now be lower than what it forecast in May. But the perspective for 2012 looks better than the previous estimate. Which means we may not have a rerun of the GFC. Fingers crossed.
Look at sterling soar! The pound clawed more than 4 cents from the Australian dollar last week, as poor retail sales plus jitters about the global outlook pulled down confidence in Australia.
Thinking about changing pounds into emu dollars? Then without a doubt the time is ripe!
Taking a closer nose at retail sales in Australia, growth sank to its deepest nadir since 1961(!) in June according to the Bureau of Statistics. Headlines regarding behemoth debt in both the Eurozone and US set knees knocking among consumers, prompting them to squirrel away their paycheques. This in spite of a deluge of price cuts among retailers, in a futile attempt to tempt people into their stores.
Commenting on these lacklustre numbers, CommSec economist Savanth Sebastian said: "it was even more discouraging to see anaemic growth despite a raft of retailers still cutting prices."
Furthermore, the pound scored against its antipodean rival not just because of cautious consumers down under, but renewed confidence in Britain. To the markets, Chancellor George Osborne's program of spending cuts makes him a model of fiscal responsibility, at a time when the US and Eurozone are coming apart at the seams.
This has prompted the markets to pile funds into Britain, expanding out the pound like a balloon filled with water. Best take advantage before it bursts, no?