Sterling Australian Dollar exchange rates had a brief respite during Friday’s trading session following on from the better than expected Public Sector Net Borrowing figures.
The big fall in borrowing caused Sterling to rally briefly against the Australian Dollar creating a small window of opportunity to buy AUD with Sterling.
However, I think the positive movement will be short lived as the Bank of England governor Mark Carney said earlier this week that UK interest rates will remain on hold until earliest 2017 which caused Sterling’s value to drop.
He is due to speak again on Tuesday and I think he’ll confirm the same and suggest that the UK economy is feeling the effects on low oil prices amongst other points which could cause the Pound to drop.
Also due out next week is the US Federal Reserve’s interest rate decision on Wednesday evening.
With the US having suggested that they could raise rates another 3 times this year any hints to further rate hikes at next Wednesday’s meeting could see the Australian Dollar gain strength as global investors will be encouraged by the US’s positive stance.
Wednesday also sees the release of Australian inflation data which is a big factor on monetary policy and any signs of a rise could see further Australian Dollar strength which could push GBPAUD rates back towards 2.
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