Sterling saw huge gains against the Australian Dollar as the Reserve Bank of Australia surprised markets by cutting the base rate from 2.5% to 2.25%.
In an unexpected move we saw movement of almost 5 cents from the high to low during the trading session earlier as investors sold off the Australian Dollar.
This is the lowest interest rate in Australian history and as with the Bank of Canada who cut rates recently I think this was partly based on commodity prices falling.
Indeed, the price of iron ore has fallen in recent times and as China has such huge demand for the resource a fall in prices is not good for the Australian economy.
On Thursday we see the release of Australian Retail Sales data and if this is lower we could see further AUD weakness against Sterling.
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