Easing fears fro global growth and a better outlook for US and China trade negotiations has helped the Australian Dollar post some strong gains in the past few weeks.
In the last calendar month the GBP/AUD exchange rate has fallen from 1.8750 to 1.8290, a gain of 2.5% for the Australian Dollar. Will this run continue?
As UK parliament is on recess for the Easter break there will be no discussions regarding Brexit meaning the pound will be vulnerable to data sets and market movements elsewhere. Of course longer term, the pounds direction will be dictated by on-going Brexit negotiations but it is important for those that have international money transfers to keep a close eye on data from around the world and the impact this will have in the respective currency you are dealing with.
Will the AUD continue to rally?
Along with improved global sentiment and improving figures from China, Australia’s largest net importer of raw materials, sentiment from the Reserve Bank of Australia also seems to be changing.
Earlier in the year, and one of the reasons the AUD devalued so much in March, was due to a dovish tone from the Reserve Bank of Australia (RBA) suggesting the next move could see interest rates fall – something that historically has a negative impact on the value of a currency.
This sentiment seems to have changed and they dispelled rumours that the next move would be a cut, reversing the impact on the value of the Australian Dollar. As a result I would not be surprised to see GBP/AUD exchange rates trend towards 1.80.
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