GBPAUD rates have continues to surprise markets and seems to be showing no signs of relenting, despite the pair hitting a fresh 5 YEAR HIGH during yesterday trading session. Australian unemployment figures on Thursday morning showed the unemployment has increased across the country but a larger amount than expected, climbing to 6.4% from the expected 6.2%. This added fuel to fire as concerns about the economy continues to build following the slowdown in their closet trading partner in China. Australia exports a large amount of their raw materials to fuel their growth and is a large contributor to their economy, so with this demand falling it is expected to have a knock on impact on their economy and therefore the Australian Dollar’s strength.
The Reserve Bank of Australia have continues in their stance and commitment to lower the AUD’s value so are unlikely to intervene and slow done this now well established trend. The governor of the bank Glenn Stevens spoke last night and gave a very gloomy outlook saying that growth would weaken and unemployment was likely to continue to grow. Worryingly he also highlighted that the banks tools to kick start to economy were becoming less effective.
Many investors will now be waiting for the 2 barrier to be broken and held, yesterday the above helped the level to be breached but there is a lot of resistance from stop orders as you would expect. As a result we will be keenly watching any economic data that could crash through the 2 barrier as once this happens there could be a continue run. (Look at the GBPEUR rates which broke the 1.30 level only 6 weeks ago and now sits over 1.35.)
If you would like more information on when this may happen or how to maximise the market by using tools like stop orders and limit orders please contact myself. Email me at [email protected] for more information.