Obama’s stance on “Brexit” causes much needed Sterling rally

AUDGBP: Australian Dollar Weakens in Worst COVID-19 Day Yet

The Aussie has been extremely resilient of late with a host of positive data from down under. Glenn Stevens the Head of the Reserve Bank of Australia has remained bullish despite a recent slow down in Chinese growth data. We have seen a rise in Sterling strength due to a swing in the polls in favour of the UK remaining in the EU. This was due to Barack Obama stating that a new trade agreement between the UK and the US would not be a priority if a “Brexit” were to occur. I think this rally could be short lived, . Wednesday at 01.30 will see Consumer Price Index (CPI) figures released. CPI is a measure of inflation and increase in inflation as seen as positive for an economy. It gives an indication as to the health of an economy and as such can cause volatility on the exchange. I feel the trend of recent positive data releases will continue and the Aussie will rebound against early week losses. If you are an Aussie Dollar seller however, I would be looking to move before the EU referendum on 23rd June. Keep in mind six months ago GBP/AUD had buoyancy levels around the 2.20 mark. If the UK remain in the EU I expect the days of the 1.80s to become a distant memory.

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