This morning Sterling has fallen for the third day in a row as UK PMI Services data come out slightly lower than expected. This has surprised the markets with Sterling falling across the board against most currencies. Tomorrow morning sees the release of Exports down under for November which could cause volatility for the GBPAUD currency pair.
The most important data release for this week will be the Bank of England’s interest rate decision on Thursday. I think it’s unlikely that we’ll see any change of interest rates or further QE but any mention from Carney about the economy shortly afterwards could have an impact on GBPAUD exchange rates.
I still believe longer term that we’ll see the Pound strengthen against the Australian Dollar even if the Aussie has had a small fightback against Sterling over the last few trading sessions. It could be argued that the AUD was oversold during 2013 so this period is simply a bit of short term profit taking.
A survey published this morning has shown that UK business confidence is running at a 20 year high according to Lloyds. 1,500 businesses have been surveyed so with confidence high in the UK this again is another reason why I anticipate Sterling strength longer term.
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