GBP/AUD rates continue to float around 1.93 on the exchange, with the pair unable to make any sustained move either way over recent weeks. It was widely anticipated that the Reserve Bank of Australia (RBA) would cut their base interest rate during their last policy meeting but when this did not occur we saw the AUD gain support, which has helped to keep GBP/AUD rates comfortably under the 2 level.
Many expected the Pound to breach glass ceiling, with on-going concerns over the rate of economic growth inside China, Australia’s largest trading partner. However, with mixed data coming from the world’s fastest growing economy and an improvement in their latest Gross Domestic Product (GDP) figures, the pressure on the AUD cooled and we now find ourselves at something of a crossroads. Of course much will depend on whether the RBA cut rates at their meeting early next month but personally I feel the AUD will find support below 2, which should help curb any major loses in the short-term.
We have seen a small improvement for the AUD against GBP today, following better than expected Australian inflation data. Looking ahead and with UK Retail Sales out tomorrow and Business Confidence figures released overnight on Thursday in Australia, we could find that GBP/AUD rates fluctuate more aggressively in the run up to the weekend.
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