GBP/AUD rates have dipped slightly during Thursday’s trading, with the AUD continuing to find support around the current levels.
The pair fell to a low of 1.8338, having been trading above 1.84 at its high over night.
The Pound has failed to make any sustained inroads against the AUD since the weekend, after premature talk of a Brexit agreement caused a sharp sell-off of GBP positions on Sunday.
This put the Pound on the back foot when trading lines opened on Monday. It has been a tough week for Sterling, which has seen its value decrease by around three cents, or the equivalent of 3000 AUD on 100k GBP/AUD currency exchange.
I anticipate that the AUD will now find plenty of support again around 1.85, when it seemed as though the Pound was set for a run on 1.90 last week, when a Brexit deal looked imminent.
This is another prime example of how the markets may price in an expected political outcome, only to see the currency in questions value diminish when the expected result does now come to fruition.
Looking at the driving factors behind GBP/AUD and any updates or breakthrough in Brexit talks, will no doubt boost investor confidence and the Pound is likely to benefit as a result. Similarly any talk of a no-deal outcome again and it will likely have the opposite e effect.
Looking at the Australian economy and current slowdown in global trade is certainly having a negative impact. This, along with the current trade war between the US & China is causing investors to shy away from riskier currencies such as the AUD. We generally see commodity-based currencies such as the AUD lose value during times of global economic uncertainty.
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