At the beginning of July GBPAUD was flirting with the 1.80 resistance point but instead started a downward slide to just above the 1.73 point seen at the end of last week. However, since Friday, with the outbreak of the Turkish crisis, GBPAUD have risen to the mid-1.75 range this morning. Further insight into how the crisis in Turkey can impact the AUD below.
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Because of this ongoing crisis, it seems all commodity-based currencies - like the Aussie Dollar – have fallen out of favour with investors for the next few weeks at least. Even Australia’s biggest trading partner China saw its currency – the yuan – weaken by 0.5% last Friday, which was its steepest daily decline in four weeks.
This highlights the exposure to risk for AUD sellers at present, especially as the situation is ongoing and looks likely to hit the Turkish Lira and potentially the Aussie further. This is not a good omen for AUD sellers however will be a welcome spike for AUD buyers, who have watched rates to against them in recent days because of Brexit no-deal rumours
The key influencer for AUD rates this morning was not the National Bank of Australia’s business confidence release – which indicated strong performance of the Australian economy in the recent short term – but Chinese retail sales and industrial production figures. These came in below the consensus, and Aussie Dollar weakness has given Sterling a small spike this morning to 1.76.
Tonight’s consumer confidence and wage price index for Q2 could strengthen the AUD slightly. Wage price index is an indicator of labour cost inflation and a good reading is seen as positive, a rise to 0.6% is expected from 0.5%.
A big moment for GBPAUD this week will be in the night from Wednesday to Thursday when Australian employment figures are released. Positive readings would follow on from recent improvements in trade balance and retail sales and could see GBPAUD test the 1.72 level by the end of the week – especially if UK data comes out worse than expected and Brexit rumours put a spanner in the works of Sterling strength.
Those with an AUD requirement may want to consider their options with one of our Traders before this release in case the markets move against them.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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