GBP/AUD rates have been marred around the 2.10 region, with strong Australian employment figures and a small rise in commodity prices contributing to AUD strength.
Sterling received a boost this morning from stronger inflation figures than expected. One of the main factors currently delaying an interest rate rise in the UK is its record low inflation, and dipped down last month into negative territory for the first time since records began in 1960. Now that this rose by 0.1% last month alone, investors are more confident and have bought Sterling in the expectation of a rate rise to be sooner than expected.
This is a nice boost to GBP/AUD rates which are now above 2.13 but the general trend recently has been pointing in the opposite direction. The volatility and unpredictability for commodity based currencies are unsurpassed. In Canada for example, invested funds were expected to leave the country at a rate of 5bn Dollars per month, and instead a further 8bn was invested in the country by foreign investors, causing the CAD to gain 2 cents against the Pound on yesterday’s trading.
As such many investors are still seeking to buy AUD while it is cheap and hope for greater returns later when commodity prices rise. This is what is holding down GBP/AUD rates so those looking to buy AUD should look to take advantage of the significant move in their favour this morning.
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