GBPAUD Rates affected by UK’s export led recovery (Tom Holian)

AUDGBP Buyers Emerge at 0.55 After Pound Surge

With the MPC minutes out last Wednesday showing that 3 of the 9 members voting for further QE Sterling has continued to fall against the Australian Dollar. Mervyn King was one of the advocates of further QE so to me it’s only a matter of time before the Bank of England prints more money.

When Sterling vs Euro almost hit parity a few years ago the UK’s economic climate was very similar with GDP very low. Therefore, a weak Pound helped to aid the UK’s recovery by allowing exports to become cheaper. The same signs seem to be happening at the moment which is why we could see further losses for Sterling before things start to improve.

The US published some very strong figures which has meant investor confidence has returned and therefore a bigger attraction to invest in higher risk currencies including the Aussie Dollar. GBPAUD exchange rates are trading in the 1.47 region and my feeling is that today we could see further losses.

US Home Sales and Construction were up which is a big sign that confidence is returning to the world’s biggest economy. Bernanke spoke earlier this evening and said there may be room for further QE in the US which could help to stabilise the economy.

For up to date information as to what is happening with AUD exchange rates then feel free to contact me directly via email Tom Holian [email protected]