GBP has continued to make strides against the AUD recently, providing some of the best buying levels of the past three years. Whilst we have seen the market support any GBP loses around 1.70, a serious move towards 1.80 was unexpected. It now seems a realistic target level with rates putting pressure on 1.78 during Tuesdays trading and when you consider the Pound is benefiting from an improving economy.
On the other side the Reserve Bank of Australia (RBA) seem unconcerned about the recent AUD loses and even feel the currency still retains too much value, which could hamper their affluent trade industry moving forward. There is also a concern over China’s on-going demand for Australia’s raw materials and any slowdown in China’s economic growth will hamper the AUD even further, due to the likely negative effect this would have on Australia’s own economy. To me this indicates there is still scope for GBP/AUD rates to move higher and all eyes will now be firmly fixed on the release of tomorrows UK Gross Domestic Product (GDP) figures. If, as expected, the figures are bullish we could see another move towards 1.80 but do not expect this upward trend to continue indefinitely.
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