We saw the European Central Bank cut interest rates yesterday in an attempt to stop inflation falling from its recent lows. The Euro weakened shortly after the decision which helped to strengthen the Australian Dollar against both the Euro and Sterling.
The banks in Australia are likely to feel the benefit of this as a shift to negative rates in Europe means that banks will be charged to keep their funds held with the ECB. With interest rates much higher in Australia then investors will be likely to choose to keep money down under.
This has led the Australian Dollar to falling into the 1.79 level against Sterling and I think this will carry on during the course of today’s trading session.
US unemployment data is due out at 130pm and this is expected to be the next big mover for GBPAUD exchange rates and will provide us with the next trend over the next few days.
Chinese Trade Balance is due on Sunday and with Chinese demand for natural resources fueling the Australian economy this could provide some movement on exchange rates.
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