The Australian Dollar surged to an 11 year high against Sterling in April after Australian consumer price inflation rose to its highest level since 1991 and Sterling continued to come under pressure from the effects of the credit crunch. The sharp decline from the beginning of the month came as the Bank of England cut interest rates to 5% as they battle with slowing growth and the falling housing market. House prices fell 2.5% n March, according to data released by the Halifax, inviting parallels with the 1990’s housing slump.

For the last few weeks the £ vs $ rates have been in a range between about 2.09 and 2.13, and it will be interesting to see what stance the RBA take on economic policy. The rising inflation signals that they may need to continue with their strategy of putting up interest rates, whereas some feel the issues in America could spark a global recession and the Australians may yet feel more of a pinch from the credit crunch.

Where to next is the million dollar question? There is some speculation that we could see some consolidation towards $2.20/2.25 as the downward momentum of the last few months eases, but such is the current uncertain climate the rates could just as easily fall back to the psychological $2.00 mark.

The problem is nobody really knows! The decision on when the right time is to move your funds across to OZ can be such a hard one given the drop in the exchange rates over the last 18 months but the more information you get at this stage the easier your decision about when to buy will be. Many peoples decision will be out of their hands as it depends on when their house sells, but you don’t need all of your funds available to fix a rate of exchange. A “forward contract” is a buy now, pay later option whereby you fix a rate with just a 10% deposit, and then agree a date to pay the remainder, which can be up to 2 years in the future. This delivery date is also flexible, and can be rolled on at no extra cost which is extremely useful in light of the current timeframes for selling houses!

Some clients choose also adopt a hedging strategy by fixing some of their currency now to protect themselves against a drop in the rates, but also giving them the opportunity to take advantage of any upturns in the market. Perhaps send it over in 2 or 3 lumps, thus spreading the risk a little bit, and using a “market order” (which is essentially an automatic buying tool at a predetermined rate) in an attempt to achieve any spikes in the rate.

With interest rates currently at 7.25% in Aus and 5% in the UK, the return is obviously better Down Under, and something to consider when doing your sums and making the decision into when to move your funds over. The decision is a very personal one, however, and there is no “right” time as it greatly depends on your own situation. Would you be more upset if you bought your funds now and the rate went up, or held off buying them and the rate went down? How much can you afford to gamble?

Learn about the different ways of moving your funds and how to maximise the amount of Dollars you start your new life with. There is no cost nor obligation to speak to the experts and talk through your situation, so even if you don’t send any funds across for the next year then you have lost nothing, and will have gained a much greater understanding of the markets and how they are affected.

HiFX have a bespoke team who will happily talk you through your options in more detail and discuss a best fit strategy with you. For a free, no obligation consultation please call the Migration Team on + 44 (0)1753 859159, email to migration@hifx.co.uk or visit our website: www.hifx.co.uk.

It’s been another testing month for Sterling. Although interest rates were kept the same at 5.25%, the Bank of England minutes kept outlook lower with future cuts possible. House prices are again showing signs of more slowdowns with the RICS house price balance dropping for the seventh month in succession signalling more than half a year of negative market sentiment.

Australia is still booming, and the continued strong employment growth has eased concerns that recent interest rate hikes (to 7.25%) are harming the economy. But despite this continuing strength, prolonged global equity declines prompted renewed risk aversion this month, with speculators withdrawing their funds from commodities such as gold and minerals (key exports), resulting in the $AUD going above $2.20 for the first time since the beginning of February. This was an improvement of over 10 cents from the lows at the start of the month, giving migrants some long awaited good news!

So does this mean that the downward trend has now stopped? Not necessarily, as it could just be a corrective adjustment and we have already dropped back to around the $2.17 levels, but it is very hard to tell where it is going from here. There is still so much doubt in the market which is causing the volatility we are seeing, and the market has been moving as much as 4 to 5 cents a day, so many sleepless nights watching the computer screens no doubt!

The RBA did leave their rates on hold in their decision on April 1st in a widely expected move, and this could signal the tightening global credit conditions have started to filter through to Australia. However, as stated, the moves we have seen have largely been as a result of cautious speculators taking their profits and just biding their time, waiting to see what happens. Should risk appetite return, then we could easily see a continuation of the Aussie Dollar strength that has seen the rates drop so dramatically over the last 18 months.

You need to make a decision when to buy, and what your budgeted rate is. Many people will be renting for 6-12 months and feel they have time to watch the markets and hope they improve. HiFX have a fully regulated Australian office that can help you monitor the markets and work with you to achieve an agreeable rate, if this is a strategy that you wish to adopt.

Bear in mind, however, that there is no guarantee that your target rate will be hit. How much can you afford to gamble? If the rates were $2.00 in 12 months time then how does that affect your new life in Oz? Those who adopted a similar strategy this time last year and decided to gamble on the market have seen a significant drop in the rates and thus the amount of dollars they have to purchase a house and start their new life with.

There are different ways to buy currency when you are moving your funds abroad and many different things to consider, so you should start thinking about your options and watching the rates of exchange as early as possible. Even if you are not leaving for another 6-12 months, or will not be moving money over just yet, the more information you get at this stage the easier your decision about when to buy will be.

HiFX have a bespoke team who will happily talk you through your options in more detail and discuss a best fit strategy with you. For a free, no obligation consultation please call the Migration Team on + 44 (0)1753 859159, email to migration@hifx.co.uk or visit our website: www.hifx.co.uk.