GBPAUD Returns To Its Long Term Downward Trend

AUD GBP Lower Ahead of PMI Data for the UK Economy

After a brief fightback earlier this week, GBPAUD exchange rates have returned to their long term downward trend and I wouldn’t be surprised to see the pair continue downwards and test the 12 month lows of 1.8587 we last saw on March the 23rd this year.

As we know exchange rates don’t move in straight lines and personally I expect the longer term trend to remain and despite further brief fightback’s from Sterling, I’m expecting further downside for the pair.

Data coming out of China has been positive this year with Chinese firms announcing that $113bn has been spent in oversea’s deals so far, already just $8bn off of the total for last year. China’s resurgence coupled with improving commodity prices has boosted the Australian economy and this is reflected by the strength of the Aussie Dollar against a basket of major currencies.

Those looking to take advantage of the recent strength within AUD may wish to pay close attention to the RBA and their decision making regarding monetary policy moving forward. Should the currency become overvalued in the eyes of the RBA it’s likely that they will look to artificially weaken the value of AUD, which could catch the market off guard. This ties in with US interest rate decisions also, as many analysts believe the RBA is waiting for the FED Reserve in the US to act first, at present the Aussie Dollar is benefiting from perceived dovishness from Janet Yellen during her most recent speeches, but expect a reverse of this trend should her attitude become more bullish.

The only economic news releases for Australia specifically this week consist of tomorrows RBA Commodity Index which is scheduled for release at 5.30 am UK time, this figure will provide us with an indication of export price growth.

If you have a currency requirement involving Aussie Dollars it may well be worth your time getting in contact with me (Joseph Wright) on [email protected] in order to ensure you make a well informed decision on when to make that particular transfer, as well as benefiting from highly competitive exchange rates from one of the UK’s leading foreign currency brokerages. Just provide me with a basic outline of your currency requirement and I will be back in touch with you as soon as possible.