GBPAUD exchange rates have risen to soem of the best levels since September trading above the critical 1.70 level of resistance. So what economic data is due in the coming weeks and months and what can we expect next for the GBPAUD exchange rate? Personally I expect some big swings but do not foresee any movement outside of the recent ranges. If you missed an opportunity on this pair in 2016 you might get another shot this year, make sure you keep in contact with me to be kept informed.
The pound is of course the currency most in spotlight of the two as investors eagerly anticipate the outcome of the Supreme Court decision due any day now. I expect this will lead to GBP strength which might push us as high as 1.75. The good news will in my opinion not last long however as we then look towards the next hard data on the UK and serious questions are raised over just what Brexit means. I would predict a lower level between now and the end of March (when Theresa May has promised to trigger Article 50) of 1.60. October saw GBPAUD sink to just below 1.60 and I would expect the rate to find its way down to this level again in the coming weeks and months.
On the Aussie side we could see some weakness too but I expect improved Chinese economic data and increased global confidence to help support the Australian economy. Whilst there is a belief that the Trump factor weakens the Aussie as investors liquidate AUD for USD, I think economic buoyancy in the Asian region as a result of the ‘Trump’ effect will actually help increase AUD strength. Just look at the data overnight Chinese Manufacturing PMI came in better than expected.
Don’t get me wrong China is still a risk factor, we could see some big problems later in the year. But personally I believe the economic uncertainty in the UK poses a bigger threat to the GBPAUD exchange rate.
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