GBP/AUD rates climbed back above 1.83 over the weekend and despite the AUD finding some support around this level, concerns over global trade tensions and a dovish outlook for the Australian economy, may have contributed to investors shying away from the AUD over recent weeks.
The AUD did show signs of a potential recovery back towards 1.80 earlier this week, but these gains were unsustainable, with the pound rebounding back to 1.82 overnight, having fallen close to 1.81 on the interbank exchange during Tuesday’s trading.
The current highs seemed relatively unlikely only a few weeks ago, with GBP positions being sold of in haste, as investors shied away from the pound, as fears over the UK’s final Brexit position grew.
However, despite these concerns that still remain, the pound has found support as the AUD has weakened, with fears over the Australian economic outlook seemingly taking centre stage.
Wages are stagnant, wealth is falling, property prices are falling and consumers aren’t spending. This is needles to say a worrying combination and with China’s demand for Australia’s exports falling to 6 month low, could the economic situation in Australia deteriorate even further?
This seems to be the concern amongst investors according to the Guardian, who go on to refer to Australia’s no-growth economy.
This dovish outlook seems to have taken the spotlight off Brexit in the eyes of investors and has likely contributed to the fall in value of the AUD.
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