So the question is when should I buy Australian Dollars? With the UK announcing it has grown in the first quarter by 0.3% much greater than expected we have seen Sterling rally across the board hitting recent highs against the Australian Dollar at 1.50+. However, during the last two trading sessions the GBPAUD exchange rate is seeing resistance levels at a fraction above 1.50 so we will need to see another data release in order for the currency pair to push past this level.
With Sterling improving by 2% this week against the Aussie it could be argued that there has been too much positive movement for the Pound so this opportunity could be quite short term. There was been initial fears that the UK would enter its third recession since 2008 so the markets have taken the news positive for Sterling.
There has been strong growth in the services sector and an improvement in oil production in the North Sea which has also led to a recovery for the UK economy as whole. According to Chancellor Osborne the deficit is down by a third, interest rates are at a 365 year low and companies have created over 1.25mn new jobs so as far as he is concerned the UK is on the right road to recovery. Personally I think it could be a false dawn so the improvement in exchange rates yesterday may be short lived.
The UK economy is still 2.6% smaller than in 2008 prior to the beginning of the infamous credit crunch so there is a long way to go still. If you would like more information about what is happening to Australian Dollar exchange rates feel free to contact me directly on email Tom Holian [email protected]