The Reserve Bank of Australian (RBA) minutes were released overnight and confirmed the assumptions in the market. This being that the decision to cut interest rates recently was based on poor economic data and forecast especially with regards to unemployment which is expected to go higher. The RBA also stated that they expect and are aiming for a weaker AUD in an effort to help their exports and economy grow in the future. The above all paints a bleak picture for the AUD currency going forward and adds fuel to the fire that going forward GBPAUD could once again climb over the big emotional barrier of GBP 1 for AUD 2.
Some will however ask why if the RBA said all of the above has the currency strengthened on the news. The simple reason for this is because they gave no indication of a further interest rate cut next month which many had expected. It impacted the forecast of when another cut may come to time later in the year strengthening the demand for their currency and giving the AUD some strength.
As you can see as a regular trader or indeed if you are new to the GBPAUD pairing that there are a lot of stories impacting markets. On top of the above also watch out for any potential impact from the European bailout renegotiation of Greek debt. When an agreement is made it is likely to bring with it some confidence for the global economy making traders more comfortable to take risk an adding demand for the AUD. So in the near future I expect buying the AUD to get more expensive, longer term these highs I think will return.
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