Wednesday saw the release of Australian GDP figures. As I am sure you are aware GDP is a key barometer as to the health of an economy. These came in far better than expected. The best levels in over three years The consensus was that there would be a decline from 2.9% to 2.8%. They came in a 3.1% which caused a rally for AUD against the pound. This was coupled with the leave campaign gaining momentum in the EU referendum polls and caused GBP/AUD to fall below the two mark.
Recently we have seen a host of positive data from Australia, particularly in unemployment, currently at a record high. The Aussie continued to rally yesterday after positive trade balance figures.
There are no further Australian data releases for the rest of the week so keep an eye on data releases on UK soil. (Please see the sterling section for events of importance). Next Tuesday at 05.30 is the Reserve Bank of Australian (RBA) interest rate decision. There has been a recent rate cut from 2% to 1.75% so I think any further change would come as a surprise. A strong Aussie however is not all good news for the Australian economy. China, whom Australia heavily rely on for their raw material exports has seen it’s growth steadily decline for some time. In order for Australia to make their exports more appealing to the Chinese we could see a rate cut later in the year.
If you are performing a GBP trade to AUD the EU referendum will have huge effect on your return. The polls are causing high volatility on GBP/AUD and it will be extremely difficult to time your trade. There are several contract options which can be utilised to maximise your return. Please do not hesitate to get in touch for further information.