The AUD’s recent momentum has softened during the early part of the trading week, with the Pound starting to claw back some of the lost ground during Tuesday’s trading. You quite often see the markets realign themselves after such an aggressive move and with the AUD spiking to some of the best levels we’ve seen in the past 6 months only a few days ago, there was always a chance the Pound would find some market support.
Despite a recovery for the Pound during the early part of today’s trading, the AUD has fought back this afternoon, with the pair now floating around 2.08 on the exchange. I now expect GBP/AUD rates to trade between 2.06-2.09 in the run up to Thursdays Bank of England (BoE) interest rate decision and subsequent monetary policy statement. These are key data releases and investors will be keeping a close eye on any statements made by BoE governor Mark Carney regarding future policies and growth forecasts.
The AUD, despite its recent improvement against the Pound, is fighting against negative market perception which has been born from an economy which has been stagnating over the past 18 months. Add to this the on-going woes facing the Chinese economy (Australia’s largest trade partner) and it is easier to see why the AUD has struggled to make any sort of sustained impact for the much of 2015.
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