GBP/AUD rates have dipped during Thursday’s trading, despite the official UK unemployment rate hitting a 10 year low yesterday. The Pound is coming under increasing pressure across the board and despite a run of inconsistent data, the drop has been quicker and more aggressive than I anticipated. GBP/AUD rates are trading over 15 cents lower than they were 6 months ago and this has come about despite the major problems facing the Chinese economy, Australia’s largest trade partners.
The official UK Unemployment rate came out yesterday at 5.1% and this represents a 10 year low. Usually this news, backed up by what we had assumed was a solid and progressive UK recovery, would have boosted Sterling’s levels, particularly when you consider Australia’s links to China and the likely negative effect this would have on the AUD. However, despite these problems the Pound is struggling to recover the ground its lost and I do not expect GBP/AUD rates to reach the highs we saw last year.
With little data of note out for Australia this week, the market focus has been on the UK and China. UK Retail Sales figures are released tomorrow and with these expected to show a major drop from previous, which if confirmed is likely to handicap any realignment for the Pound.
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