GBP/AUD exchange rate forecast (Mike Vaughan)

AUD GBP Struggles at the 0.5350 Price Level

Sterling exchange rates have nudged above 1.69, has the small window for AUD sellers been missed? For me I still see longer term strength for the pound and would expect the GBP/AUD rates to head back towards the mid 1.70’s in the coming weeks – for this reason I feel anyone selling AUD should consider their position whilst rates still sit below the 1.70 level.

Data to watch out for this week:

Tomorrow – US FOMC minutes. This will give clues as to what the FED has in store, particularly as far as ‘tapering’ of QE is concerned. The FED has previously indicated it will look at tapering should unemployment figures improve, and as figures haven’t been as positive of late this is the reason they have delayed tapering and a big reason as to why the AUD has strengthened in the past few weeks. For me the FED will still look at tapering (unlikely until next year) however any hint towards this in the minutes and I would expect the AUD to lose value.

Thursday – we have UK business confidence figures and UK Nationwide housing data. Recently UK data has been much better and and should this trend continue then again we could see some GBP strength Thursday morning.

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