After the Pounds recent surge off the back some much better than expected economic news releases, the Aussie Dollar has begun a fightback pushing the GBP/AUD back towards 1.70.
It will be interesting to see which direction the pair take and which key level is reached first (1.80 or 1.70).There is a lack of economic releases this week aiding the pairs movement so I think we’ll have to wait some time before either of those benchmarks are hit.
Over the past 48 hours it’s been the Aussie Dollar which has looked the strongest as news surfaced that Australian exports rose 3% on a monthly basis throughout July. Being a export driven economy this news was met well by the markets and we saw the GBP/AUD pair fall almost immediately. Similarly, Australia’s third largest export, iron ore, rose by 4% which of course is further good news for those hoping the Aussie Dollar will strengthen and this gain in iron ore price have fallen in line with gains across many commodities recently which also have worked in AUD’s favour.
There has been talk of further interest rate cuts from both the Reserve Bank of Australia as well as the Bank of England although the positive news out of both countries recently may well lead to those idea’s being shelved.
Personally I think there is scope for further AUD strength and if I had to pick I think we’re more likely to see GBP/AUD reach 1.70 than 1.80.
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