GBP/AUD rates have slipped slightly over the past week, with the pair moving back below 2.15 at the low. Whilst these levels should still look extremely attractive to those clients purchasing AUD, we have seen a slight dip from the highs of last week, when the pair were trading above 2.20.
Despite yesterday’s positive UK employment data and the on-going problems in the Chinese economy (Australia’s largest trade partners), the Pound could not recover this lost ground.
A key development in Australia this week was the ousting of the now former Prime Minister Tony Abbott. He was extremely unpopular and rightly or wrongly has been blamed for the current demise of the Australian economy. This move seems to have brought some confidence back to the markets and the AUD could now find some protection under 2.20 in the short-term, although I do not anticipate further sustained improvement for the AUD unless we see a turnaround in the Chinese markets.
On Sterling’s side I expect the Pound to receive continued market support, with the majority of UK data looking strong. I don’t think we will see the Bank of England (BoE) raise interest rates before the turn of the year and this may dampen any further aggressive gains for the Pound, so personally I would be tempted to secure a rate around the current levels, which still remain close to a 7 year high.
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