GBPAUD exchange rates fell by over 1% during yesterday’s trading session as iron ore prices have begun to rally and Australian Trade balance data was much better than expected.
As concerns have increased that Chinese demand has slowed the rise in iron ore and the trade balance release has put paid, at least in the very short term, to fears that Australia is struggling.
However, I am still of the opinion that the Australian Dollar will weaken against the Pound as even if the RBA do not cut interest rates next month the rhetoric used over the next few weeks could be aimed at weakening the AUD to make it more competitive.
The Bank of England are due to meet tomorrow to discuss interest rates and although there is almost no chance of a rate change any murmurs that more than 2 of the 9 members want to change things could see Sterling gaining against the Australian Dollar.
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