GBP/AUD rates have continued to fall during Tuesday’s trading, providing some much needed respite to those looking at selling their AUD positions. Today’s move is a continuation of last week’s trend where we saw the AUD strengthen significantly, moving it away from the recent lows against GBP. We have now seen Sterling drop by almost 10 cents in only a couple of weeks and with positive data emanating from Australia, we could see the AUD put pressure back on 1.80 before long.
The AUD has struggled against most of the majors for much of last year, particularly against GBP. GBP/AUD rates were trading around 1.44 in early 2013, before a loss of over 40 cents pushed exchange rates back up around 1.90 and it seemed as if the trend was certain to continue on an upward curve. However, as often happens the currency markets have proved unpredictable and a change in market sentiment could now mean a change in fortunes for the AUD. With growth forecasts improving again and the demand in China for their raw materials starting to increase, there are reasons to be optimistic. When you consider the Reserve Bank of Australia’s (RBA) announcement that there will be no further interest rate cuts in the foreseeable future and a concern by the Bank of England (BoE) that the Pound was gaining too much value, I am of the opinion that GBP/AUD rates could struggle to make any significant inroads back toward 1.90, under the current market conditions.
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