Pound to Australian Dollar exchange rates were buffeted earlier this week and are now holding close to these four week lows where rates were in January. At least the falls are not continuing, but this resistance level may not last for long.
GBP/AUD fell by two cents on Tuesday following surprising data emerging from China overnight.
Due to Australia’s close trading relationship with China, any news coming from there, whether positive or negative, will have some effect on the value of the Australian Dollar.
In this case, extremely positive news meant that confidence in the Australian economy soared in the very early hours of Tuesday morning in the UK, with the resulting boost on the Australian Dollar against the Pound driving GBP/AUD back down to 1.61.
This is largely where we have remained despite the choppy market visible today.
Moving forward we have Australian employment data overnight tonight which is expected to be fairly underwhelming, so barring any surprises we may see more attractive buying opportunities for anyone with a Pound to Australian Dollar interest by tomorrow morning.
However, moving forward similar pressure can be expected on GBP/AUD, but largely from the Sterling side of the pairing.
Given that the debate on Parliament’s role in the Brexit which has supported Sterling’s value so heavily over the past four weeks has finally concluded; until some new narrative hits the marketplace, there appears to be a stark rise in risk over opportunity for Australian Dollar buyers over the past few days.
At the moment most traders are worried that inflammatory language from the UK and Europe in the run up to the triggering of Article 50 may see similar drops in Sterling’s value to what was seen in October.
Conversely, anyone with an Australian Dollar to Sterling interest is in less of a rush from my perspective and should see more attractive levels in the coming weeks.
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