In what has been one of the most volatile weeks in recent times for the Australian Dollar exchange rate we have seen the AUD weaken against the Pound towards the end of the week.
The currency pair has been affected by the ECB action taken on Thursday which initially helped to strengthen the AUD however a little later we saw a flight to safety by global investors who have ploughed into the US Dollar.
These same investors have sold the Aussie if favour of the USD which has led to the GBPAUD exchange rate going in an upwards direction.
Iron ore prices also saw a fall this week and as this is one of Australia’s largest commodities this also saw the currency weaken.
Indeed, in the Australian iron ore industry companies reported more than $3 billion in asset writedowns this week.
With the RBA set to meet on February 3rd if there is a rate cut we could see Sterling rise against the AUD but an absence could see a short term strengthening for the Aussie Dollar.
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