The Australian economy is only a month away from entering it’s 104th consecutive quarter of economic growth without recession and breaking the previous record set by Holland. Despite variable global economic conditions, the Australian economy managed to ride the waves of high commodity prices which is said to have consistently supported growth and employment. Evidently GBP/AUD rates have followed suit and the pound has struggled to build any consistent momentum in order to break out the 1.65 mark.
Unfortunately for AUD holders, the Reserve bank of Australia may well be forced to loosen the Aussie’s grip over the pound despite the record-breaking growth of its economy. Recent economic releases have shown Australia’s trade balance to have taken a considerable hit, sinking to $1.3bn with exports dropping by more than 3% as a result of the overwhelmingly dominant AUD hindering Australian products’ competitiveness on the international stage.
As a result, although the RBA is generally expected to keep rates at 1.5%, some analysts are predicting governor Philip Lowe to drop the rates further in a bid to weaken the AUD. The interest rate decision will be released in the early hours of Tuesday morning. If you are an AUD seller I would strongly recommend opening a free account with us here. One of our specialist currency brokers will happily discuss the number of contract options available to you so you can limit your exposure to market movements outside trading hours and protect your returns.
There is also a raft of economic data out this week that may present short term spikes for GBP sellers, mainly coming from Australia’s leading trading partner China. Wednesday morning sees China’s trade balance breakdown and foreign direct investment released. Any slow down from the projected 20% increase year on year could test investor confidence and drive sterling strength as a result.
For more information on how future data releases could affect your Australian Dollar buying or selling requirement, call our trading floor on 01494 725 353 or email me here.
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