The pound is finally catching up some lost ground against the Australian dollar following a raft of upbeat UK economic data which is welcome news for sterling exchange rates. GBP AUD has seen a good rally after the Confederation of Business Industry reported an impressive two year high for manufacturing exports. It follows healthy UK unemployment data last week as well as a bumper July for retail sales.
This has been brought about by the recent weakness in the pound which has made British exports much more competitive, but it does still highlight a buoyant manufacturing sector which his performing well. This is excellent and much needed positive news for Britain and could see the pound strengthen further.
Meanwhile in Australia construction data released in the early hours of this morning arrived weaker than expected but also in negative territory suggesting a period of contraction in this sector.
For anyone selling Australian dollars then this is probably the time to consider taking advantage of the current attractive levels. If the Brexit impact on Britain is not as bad as many had forecast then the pound could see further gains across all of the major currencies including the Australian dollar.
UK Gross Domestic Product figures are published on Friday and should make for an interesting end to the week. I cannot see a strong number here and the risk for the pound is that there is a real chance there could be a very small deterioration in the three month period up to the end of June which is when the UK referendum actually took place.
My view is that there may be a fall in GDP to 0.5% which could act as a precursor to weaker growth in the post Brexit period. This would almost certainly present a risk for the pound.
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