Having made some changes to their economic policy the Chinese have made a big impact on exchange rates and so long as the Chinese economy remains under pressure, demand for the raw materials, the peak of which has underpinned Australian economic and currency strength, looks likely to remain weak. Investment in mining stocks and industries has been falling as investors fear for the future. In such an environment it is tricky to see any improvements for the Aussie to the extent which would be required to trade below 2.
The pound too has been under pressure with us witnessing some drops in the strength of the GBP, however it would take some major bad news to warrant such a price change. If you are holding Aussies and looking to sell for the pound planning an exit strategy seems to me the best course of action to avoid disappointment. All in all we are looking at some of the best times in years to buy Aussies so if this is you why delay?
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