GBP/AUD rates have dipped slightly during Friday’s trading, with the pair touching 2 in the market on more than one occasion this week. With Sterling struggling against many of the other major currencies this week, it was interesting to note that the opposite was happening against the AUD. Whilst it is a much more volatile currency pair than either GBP/EUR or GBP/USD, I was not expecting the Pound to hit 2 this week.
As regular readers will know the Australian economy is heavily reliant on China’s economic well-being, due to the heavy trade links between the two nations. China’s economic has slowed recently and this has hurt the AUD, along with the Reserve Bank of Australia’s (RBA) commitment to lowering the value of the AUD, in order to boost their export trade. The recent RBA minutes also indicated that the RBA still had the option of cutting their base interest rate further, news that again knocked market confidence in the AUD.
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