GBP/AUD rates have dipped again during Tuesday’s trading, with rates now floating between 1.82-1.83 on the exchange. This move is a continuation of yesterday’s spike and it does seem as if the AUD has started to realign itself after a poor recent run against GBP. This was to be expected following the aggressive move witnessed a couple of weeks ago when the Pound gained almost 15 cents against the AUD.
However, following the Reserve Bank of Australia (RBA) decision to keep their base interest rate on hold at 2.5% and their subsequent comments, we could find that today’s AUD strength does not last for long. Whilst rates were expected to be kept as they were, it was their accompanying statement that for me was key. RBA members indicated that they still felt the AUD was too strong against the major currencies, including the Pound. To me this is a key as its very rare that a central bank will divulge this information unless they anticipate it will help to counter their concerns and as such I would expect the AUD to weaken again because of it.
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