Sterling Australian Dollar exchange rates have been trading in the region of 1.80-1.81 during last week but have generally fallen following some very low US GDP data out early in the week.
US Q1GDP showed a fall of -2.9% which was the worst on recent records but arguably it could be said that owing to the severe winter that this was indeed a one off. However, the impact it has had on exchange rates is to strengthen the Australian Dollar against the Pound as global investors have moved money into higher yielding currencies including the Australian and New Zealand Dollar.
Typically, even if the US performs poorly this actually strengthens the USD and weakens the AUD but with the uncertainty also surrounding Iraq investors have played safe.
Inflation data and also business confidence data is due out in the morning and I think we could see some Australian Dollar strength.
The Reserve Bank of Australia is due to meet on Tuesday and if there’s any talks of rate hikes we could see GBPAUD fall below 1.80 this week.
Trade balance data for May is out on Wednesday down under and this could also impact Australian Dollar exchange rates.
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