The Pound has continued to remain relatively strong vs the Australian Dollar this month with a number of attempts to break towards 1.80. Personally speaking I think this is simply a matter of time before the Pound breaks higher owing to a number of different reasons. The Australian Dollar report below looks into the factors which impact the AUD as a commodity currency, including the ongoing trade war between the US and China. The table below shows the range of exchange rates throughout the past 30 days, and shows the difference in AUD you could have bought when selling £200,000.00 during the high and low points.
|Currency Pair||% Change||Difference on £200,000|
According to the latest official data from China the world’s second largest economy grew by 6.7% and although against the global backdrop this figure is incredible it is highlighting a big slowdown. With the US threatening to raise tariffs on up to US$200bn worth of Chinese goods coming into the US we have seen a problem for China and this is being reflected in GDP figures. Since the first week of this month the US has put tariffs on US$34bn and China has threatened to retaliate which if not controlled could result in the ‘largest trade war in economic history.’
As the trade wars continue between the US and China the main problem is that as Australia is so heavily reliant on what happens in China; this can often cause weakness for the Australian Dollar and this is part of the reason why I think we’ll see 1.80 in the near future for GBPAUD exchange rates.
The Reserve Bank of Australia published their minutes from their most recent meeting this morning and it appears as though interest rates will remain on hold for the near future. Meanwhile with the US and the UK potentially looking to increase rates then the yield in Australia is becoming less attractive and this is another reason why I think we could see the Pound make further gains.
On Thursday Australia will release the latest Unemployment figures and this has been relatively mixed of late improving last month compared to the expectation but falling short the month before. Indeed, until unemployment has a sustained positive movement and the problems in China start to wane I cannot see much improvement in the value of the Australian Dollar.
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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