The Reserve Bank of Australia (RBA) kept interest rate son hold overnight at 1.5%, with the Pound making some small gains against the AUD this morning.
GBP/AUD rates have touched 1.70 again but the AUD is continuing to find support around this threshold.
It is likely that investors will need to see evidence that the Brexit negotiations are progressing, in order for the Pound to make any aggressive move above this level.
A recent downturn in Australia’s economic output and a report indicating that the RBA may not raise interest rates until 2019, has weakened the AUD’s value.
It was only a few weeks ago that GBP/AUD were trading close to 1.60, so the current high and recent improvement may be the opportunity those clients holding GBP have been waiting for.
The Pound has also benefited from talk of a prospective rate hike by the Bank of England (BoE) but this is still not guaranteed and may have already been priced in to Sterling’s current value to some extent.
We also need consider the on-going negative perception around Brexit negotiations and with UK PM Theresa May struggling to keep her party aligned, many negative factors continue to weigh heavily on the UK economy.
For these reasons I would not be gambling on a major spike for the Pound over the coming weeks, with any trade around 1.70 offering significant value in my opinion.
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Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
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