GBP/AUD rates have dropped below 2 for the first time since June 2015, providing AUD sellers with a window of opportunity that many clients have been waiting for.
Whether this level is just being tested and rates will snap back is difficult to tell but what we can conclude is that Sterling is certainly losing market confidence and support. If we do not see the Pound make a recovery over the coming days, then this trend could well continue and a move down towards 1.95 is certainly a possibility.
The Pound is continuing to come under pressure across the board and with the recent Reserve Bank of Australia (RBA) minutes setting a more bullish tone than the markets were expecting, we may find Sterling struggles to make a sustained move back above 2. Of course there are still the problems in the Chinese economy, which will continue to have a knock on negative effect for the AUD. However, if China does start to move its economy forward again then the AUD may find increased investor support far easier to come by and this could signal the aggressive move AUD sellers have been waiting for.
Key data to watch out for tonight is the official Australian unemployment rate which is meant to come out at 5.8%. Expect increased movement on GBP/AUD rates tomorrow if this figure comes outside of expectation.
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