GBP/AUD rates have remained fairly flat during Monday’s trading, with the pair hitting 2.09 at today’s high before falling away to just under 2.08 by close of European trading. Whilst the Pound has come under pressure against most of the major currencies over recent weeks, it has continued to hold its position against the AUD for the most part.
Despite a run of inconsistent UK data Sterling hasn’t suffered as it has done against either the EUR or USD. One of the major reasons for this is the negative downturn in the Chinese economy, which remains Australia’s largest trade partner. The fall in the Chinese stock exchange has been well documented but it is Australia which is feeling the biggest pinch as they rely heavily on the export of their raw materials, in particular iron ore, to China. Whilst these exports boomed during the years of progressive economic growth in China and in turn helped to drive the AUD’s value up, it is now having a mirrored effect and the AUD is suffering as a result.
The good news for those clients holding AUD is that the situation would likely be worse, were it not for the problems facing the Pound at present. I certainly do not expect a move back towards 2 and with the on-going concerns facing China and the potential impact this could have, I would be tempted to secure any short-term positions around the current levels.
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