GBP/AUD rates were hit by an artificial boost today as more capital came flying out of the Eurozone when an official at the Federal Reserve Bank of America stated that the Eurozone will have to undergo larger amounts of cash injections than they first suggested under their new Quantitative Easing Program.
This unexpected boost is a gift to those looking to purchase Australian Dollars, and a frustration to those hoping for the rates to calm down after such a mammoth start to the year for Sterling. Even with this the AUD has found support under the 2 level. Settling at the close of trading today in the 1.97’s.
There is little more that can be announced to test the exchange rates with the Australian Dollar. From this point commodity and energy prices can only really rise, and the dovish tone of the Royal Bank of Australia cannot be weakened really after repeated calls to lower the value of their currency they have still found resistance at 2. Essentially investors are still holding Australian Dollars and waiting for its value to rise up again, as there is much more room for them to do so.
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