Following yesterdays sharp decline in Sterling’s value against most currencies, Sterling has weakened again against AUD. Trading GBP – AUD prior to the Bank of England interest rate decision was in the 1.67 region, followed by trading below 1.65.
Although the Bank of England didn’t change the interest rate decision, the statement released mentioned maintaining the interest rate static at 0.5% for a lot longer than most people had initially forecasted. As the interest rate is a strong indicator to economic strength, the fact that it is due to stay so low acts as a negative advert for the UK economy.
On the other side of the world, the Reserve Bank of Australia has previously hinted at reducing interest rates which will weaken AUD, when they happen. I think that we may see this cut in August.
I believe that as Sterling is weak, this could be a very welcome opportunity for AUD sellers, however I don’t believe that GBP AUD will drop below 1.60.
If I were buying AUD, I would be targeting a figure between 1.65 and 1.70, as I believe that 1.70 is a resistance mark.
Please feel free to drop me a line if you have any questions regarding an upcoming transfer, [email protected] . I am also contactable directly on the trading floor 01494 787 478, please ask for Andrew Bromley.
Thank you for reading!
P.s Come on the British Lions!