The AUD weakness is reflected well in the GBP/AUD pair, as Sterling is trading towards the bottom end of its annual trend against the Euro and the US Dollar whereas this is not the case for GBP/AUD.

Currency Pair% Change in 1 monthDifference on £200,000
GBPAUD4.03%$14,508 AUD
Trade wars a potential negative trigger but US Consumer Confidence remains high

This demonstrates that the Aussie Dollar is struggling at the moment, and if the data released from China this week is a prelude to a disappointing year for Chinese data I think we can expect to see the Aussie dollar drop throughout the year.

With Australia’s economy being closely tied to China’s, as China is its main trading partner I think that a continuation of the slowdown we’ve seen from the world’s 2nd largest economy will have a detrimental effect on AUD’s value.

Another issue putting pressure on AUD’s value is the reluctance of the RBA (Reserve Bank of Australia) to hike interest rates down under. There are concerns that a hike would hit the property market dramatically, and this has resulted in the deviation between the US base rate and Australia’s being it’s highest in the AUD’s history.

With the US Federal Reserve Bank planning on making 2 further hikes this year, the gap could continue to widen which would likely result in further loses for the Aussie Dollar.

Will GBP/AUD consolidate north of 1.80?

The GBP/AUD pair spent much of yesterday afternoon hovering around the 1.80 mark. It’s likely that this level could remain a resistance point for the Pound, but if the pair manage to consolidate north of this benchmark I think a move back up into the mid-1.80’s is a possibility.

The trade war talks and China’s concerning data releases are likely to remain the main influencers for AUD exchange rates, but there will be Australian Inflation data released in the early hours of Friday.

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