GBP/AUD rates have remained fairly static this week, ahead of some key data for both the UK & Australia over the next 24 hours. The AUD has found support in line with Sterling’s struggles but with the on-going economic downturn in China having a negative effect on the global markets, in particular Australia, I do not expect GBP/AUD rates to head below 1.80 under current conditions. It may be that we get some data come outside expectations, which will then drive the market in one particular direction but as it stands I expect GBP/AUD to remain range-bound between 1.83-1.88 in the short-term.
Due to Australia’s heavy reliance on the export of raw materials, they are always susceptible to global slowdowns, perhaps more than most. The Reserve Bank of Australia (RBA) have indicated they would cut interest rates again if necessary and with the Pound likely to recover later this year, AUD sellers may have found the perfect opportunity to sell near a high. I do feel longer-term that the AUD will come under pressure due to their trade links to China and with the Brexit looming in June, we could see a recovery following this decision.
Looking ahead and we have a host of employment data out for Australia overnight, including the official unemployment rate which is meant to increase to 5.9%. If this prediction comes to fruition expect GBP/AUD rates to rise, ahead of the BoE interest rate decision and subsequent statements.
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