Whilst the Pound has gained some positive momentum against most of the major currencies recently, it’s struggled to make any sustained impact against the AUD.
GBP/AUD rates spike aggressively during yesterday’s trading, with the pair moving back towards 1.64. However, we did see it hit a high of almost 1.65 last week before retracting below 1.64 this morning and at present it seems to be marooned under 1.70 for the foreseeable future.
This has become a key resistance level on the pair and based on the on-going uncertainty surrounding the UK’s Brexit, it may be that the Pound will struggle to break through this threshold anytime soon.
The AUD has benefitted from a run of positive economic data and the uncertainty surround the UK economy at present. The Pound is continuing to be stabilised by Brexit talk and even if Theresa May gets her wish and Article 50 is triggered in March, how we will facilitate our exit over the coming months & years could be seen as negative by the markets, depending on the deal she is able to achieve.
However, due to the fact the AUD is a commodity based currency and as such relies heavily on its export trade, in particular the export of its raw materials to China, any global slowdown in this sector will hit their economy hard and the AUD would likely lose value as a result.
Therefore I would be looking to take advantage of the current highs for AUD sellers and not gamble on what has become and extremely unpredictable and volatile market.
Business Confidence figures for Australia were released overnight and these came in well above market expectation, which has boosted the AUD’s value again this morning against Sterling.
Looking ahead and we have a host of employment data, alongside the official unemployment rate overnight on Wednesday, so it may be wise to secure any short-term AUD transfers prior to this and remove any market uncertainty.
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