Australia has long been one of the top destinations for Brits looking to move abroad. If you are looking at sending money to Australia to fund a property purchase, you’ll have seen massive movements in exchange rate changing the cost during the recent turbulent times. The “Aussie” plummeted in value against the Pound, making overseas property cheaper, in October before regaining some value in December. The differences are staggering – a property costing $300,000 would set you back nearly £143,000 in September, but only £118,000 just 6 weeks later.
GBP – AUD last 3 months
Against the US dollar, the Aussie depreciated by a massive 37% in the same timescale.
The reason for this volatility? In the global credit meltdown, investors have moved money around the globe in search of higher returns. Traditionally, Australian interest rates have been higher than most western economies, and “carry trades” have been popular where investors borrow in one currency to invest in another with higher interest rates. Demand for that currency increases, and the price goes up.
Recently however, these positions have been reversed as Australian interest rates have fallen and investors have needed to sell dollars to place money elsewhere. As dollars were sold off, demand for the Aussie fell, and the price therefore dropped significantly.
That’s what presented buyers of Australian property with the opportunity for a bargain.
Of course, the most important thing to check if you need to transfer money to Australia is that you obtain a competitive exchange rate. Typically, the high street banks do not offer very good deals on large amounts and significant savings can be made by using a specialist foreign exchange broker like Currency Index.
Foreign currency brokers can help you through the whole money transfer process and tell you what’s happening in the market, to help you decide when to make your purchase. In addition, rates can be secured and guaranteed up to 2 years ahead, so you can buy your Australian dollars well before you need them without having all the funds available, to take advantage of a preferential rate.
In volatile times, emigrating doesn't need to be any more stressful – make sure you get a good deal on your foreign exchange and try to secure your rate when the time is right.
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