AUD/GBP exchange before or after election

white_noise

About to transfer a fair bit of money from aus, what are general thoughts on when to transfer for best return? before or after election.
WN

bowlhead99

To be honest if it concerns you, just do half half.

Otherwise if the rates improve afterwards you will be kicking yourself that you went early, and if the rates worsen afterwards you will be kicking yourself that you left it. You will hopefully just brush it off and say, fair enough, nobody could have predicted the market - but you will be annoyed.

So, just accept that nobody on the planet can predict the market with accuracy and the 'general thoughts' of an anonymous group on the internet with no vested interest in your success or failure, are worse than useless.

Basically if you need the money to buy your house or whatever, and it is enough money at the moment to do what you want with it - the sensible thing to do is to bring it to pounds now. Otherwise if you have a big forthcoming expense in pounds sterling but the money with which you will cover it is all in aussie dollar, you are taking exchange rate risk every day until you exchange it to get a gbp cash balance to cover your gbp outgoings. If you think the election is going to spike the rate one way or another and you don't want exchange rate risk, you would want to move it all ASAP.

If you don't move it ASAP it implies you don't think there is much of a risk holding beyond Thursday / Friday, or you are not bothered by the risk, or perhaps you even like the risk because it could make you a 'winner' especially if AUD strengthens. But if you don't have some specialist insider knowledge, I wouldn't count on that.

So, you can make an argument to move it now to remove any doubt and risk. Get a known amount of pounds now. Or you can make an argument to do 50/50 to help fight your personal demons when you get upset with yourself when you make a bad call. The one that is hardest to make an argument for is just leaving it until later.

Of course, the election may have no major result at all. There are plenty of events and announcements in the UK, Aus and elsewhere that move the markets every day. The rate has moved up and down between 1.88 and 1.98 all the time for the last quarter. This may turn out to be a non event.

But still, if it's an event to which you attach some significance, avoid the risk by moving the money now or at least half of it.