Sterling vs Australian Dollar was trading either side of 1.90 during Friday’s trading session as the Asian stock market remained strong in the light of poor Chinese manufacturing activity released in the last few days.
Asia and in particular China is a big factor in the strength or weakness of the Australian Dollar so the news from the stock market allowed the AUD to gain marginally against the Pound on Friday.
However, I still believe that we’ll see Sterling gain against the Australian Dollar during the course of January as Sterling could benefit from the Eurozone intervening with monetary policy on January 22nd.
Indeed, in Australia there is a great deal of pressure being put on the RBA to cut interest rates which is likely to weaken the AUD against Sterling.
Mining investment peaked in mid 2012 and has seen a decline ever since and over the next 12 months the RBA expects mining to be a big drag on GDP growth. Therefore, this is why I expect Sterling to rise against the Australian Dollar.
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