The GBP/AUD rate moved back above 1.63 this week however as the end of Friday approaches most of the gains have now been given up, leaving the rate in the low 1.60’s. This week there has been significant movements across global trading due to perceptions of risk and reward being brought into questions. The flair up once again of the US and North Korea episode saw investments fall back into the US Dollar leaving the likes of the riskier Aussie Dollar. However towards the end of the week as the story falls off the front pages the Australian Dollar has gained back any lost ground.
Moving forwards I think there will be more weakness in the Aussie for the reason, as we certainly haven’t seen an end to the unrest in Korea. Most of the provocations have taken place over the weekend so it wouldn’t be surprising if when we come back on Monday there has been a movement back above 1.63.
RBA Next Week on Tuesday
The Reserve Bank of Australia will provide their latest insights into the economy with a interest rate decision, this in my opinion is going to be a non affair. The rhetoric that follows could be interesting though as the RBA only a few months ago suggested they expect to see the rate increase from 1.5% to 3.5% in the next few years. At the moment inflation isn’t rising fast enough to commit to this and we could see some back tracking, which could see the Aussie lose ground.
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