Since the RBA’s interest rate cutting cycle has come to an end as of last week we have seen the Australian Dollar strengthen by almost 4% in a week. Previously Sterling appeared to be on a relentless path upwards against the Australian Dollar hitting a 4 year high back in January.
The statement was clearly a strong bit of sentiment as previously some of the RBA members had highlighted the benefits of a weaker Aussie Dollar and even mentioned possible intervention at some stage. Recently Australian inflation has been on the up as well as a business confidence survey last week as well.
Tomorrow we have the release of Home Loans data and the Business Confidence survey published by the National Australia Bank. This will provide us with a short term view as to how the Australian Dollar may perform this week. However, more importantly the Westpac Consumer Confidence survey is published which recently has been rather negative. More negative news could result in further Australian Dollar weakness tomorrow night.
Wednesday sees the release of the Quarterly Inflation Report for the UK. Inflation for the first time since 2009 has hit the government target of 2% highlighting the positive feeling surrounding the British economy which has had a good run since summer 2013. Indeed, we have seen GBPAUD exchange rates improve by almost 30% during 2013.
Thursday see the Australian unemployment rate predicted to hit 5.8%. Any change could result in volatility for GBPAUD exchange rates.
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