The AUD was given a boost this morning following the release of the latest Gross Domestic Product figures (GDP) for China. China’s demand for Australia’s raw materials has been a major positive for the Australian economy over the past few years, which in turn has driven the AUD up. When productivity in China slows (as has been the case over the past few months) we often see the AUD weaken, as the demand for these raw materials wanes.
The Reserve Bank of Australia (RBA) has indicated recently that it will keep current interest rates on hold for the foreseeable future, amid fears that there were to be further rate cuts over the coming months. This seems to have calmed market concerns with the AUD moving back through 1.68 against GBP, providing some of the best levels AUD sellers have seen over the past few months. Following this announcement and the positive GDP figures from China, I believe we could see the AUD continue to strengthen against both GBP and the EUR in the short-tem.
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