The Australian dollar has found some support after the seismic shift it has seen in recent weeks especially after the surprise cut in interest rates from the Reserve Bank of Australia last Tuesday. A move back to $2 for GBP AUD could be on the cards but resistance is likely at these kind of levels. I struggle to see the Aussie weakening much more from here. Chinese inflation numbers from this morning have arrived slightly better than expected which is having a slight positive effect on the Australian dollar.
My view remains that the pound should be in for some serious headwinds as a direct result of the referendum campaigning here in the UK. With the new London mayor Sadiq Kahn now in city hall, Leave campaigner Boris Johnson has now started his official campaigning this week. This a is a hugely interesting time for British politics and the gloves are now very much off. Iain Duncan Smith the former Secretary of State for Work and Pensions has claimed today that Germany were privy to the deal that David Cameron put forward for Britain and vetoed the emergency brake on immigration. We still have some way to go before 23rd June but it is this period in the run up which carries a real risk for the pound. There could be some very good opportunities for selling Australian dollars in the coming weeks.
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