GBP/AUD rates have dropped off over the past week, with the pair dipping below 1.90 at the low. With UK economic data not as strong recently, it is not surprising to see the AUD realign itself slightly. UK Factory orders have fallen to a 2 year low, proof that our exports are being hurt the Pound’s rising value and despite better than expected Retail Sales figures released this morning, the Pound seems to have lost its recent momentum.
Despite this dip for the Pound I do not expect this trend to continue in the long-term. The Reserve Bank of Australia (RBA) seem as committed as ever to lowering the AUD’s value, in order to help boost their exports and with mixed data coming out of China recently (Australia’s largest trading partner), the AUD could struggle to make any sustained inroads against GBP under 1.90.
With little data of note out for either the UK or Australia for the rest of the trading week, I do not anticipate any major moves from the current levels. I do feel it is more likely we will see Sterling creep back up, than see the AUD start to move towards 1.85.
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