The following report will look at factors that could impact GBPAUD exchange rates this week. Australia have reported strong GDP numbers this week which could mark the beginning of further AUD strength.
The Australian dollar has bounced higher on the back of stronger trade balance data from China. Although exports from China arrived better than expected it was the volume of imports which surprised the markets which unexpectedly climbed higher and in turn helped strengthen the Australian dollar. China is Australia’s largest export market so these figures which highlight a more buoyant China is welcome news for Australia and hence the dollar.
The increase in Chinese imports was substantial with a climb higher of 1.5% which was against expectation for a decline of -4.9% and represents the first rise in 22 months.
Australia have also reported solid Gross Domestic Product (GDP) numbers this week which in fact mark 25 years without a recession down under. Australia have faced some serious headwinds to its economy in recent years including the decline in commodity prices whilst also facing challenges to its mining sector. The slowdown in China has also had a major negative impact on Australia. It is no wonder the dollar continues to perform and maintain the higher ground at present. In the longer term the Dollar could see considerable gains as the global economy improves.
As far as GBP AUD is concerned the recent rally for the pound in recent weeks appears to have run out of steam on Brexit concerns. The mood in the UK has been very positive after a series of UK Purchasing Managers Index surveys although the Brexit uncertainty is continuing to keep pressure on sterling exchange rates. There are a number of Australian data releases next week. Business Confidence figures are released on Monday and consumer confidence on Wednesday ahead of unemployment data and the Reserve Bank of Australia bulletin. With a host of UK economic data as well there should be considerable opportunity for buyers and sellers for GBP AUD.
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