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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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The key reason for Sterling’s current vulnerability however is Brexit. If there is one thing investors do not react well to it is uncertainty and at present it is extremely difficult to call whether or not a deal is going to come to fruition.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.