Are we now witnessing new Buoyancy levels on GBP/AUD?
Sterling has advanced considerably against the Aussie of late due to several contributing factors. UK retail sales was impressive, figures sat at – 0.2% and were predicted to land at 0.4%. They came in at 0.8%. We also saw UK average wage growth move closer to parity with inflation which is a sign of a very healthy economy.
There was already the strong possibility of an interest rate hike from the Bank of England (BOE), but these date means it is almost a certainty.
It has also been confirmed the UK will have access to the single market during the Brexit transitional period which will relieve a great number of UK firms.
On the back of this GBP/AUD went as high as 1.85, but quickly retracted. I am of the opinion this will be a new resistance point on GBP/AUD so if you are an AUD buyer and you have to move short term I would consider moving in the 1.84s.
The Aussie is losing its attraction to it’s investors due to the US now offering higher returns and future rate hikes. I am of the opinion the hike by the Federal Reserve however are already factored into current levels.
Be sure to keep an eye on Australia’s primary export, Iron Ore. china is the main purchaser and the current trade war with the US could well influence AUD value.
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