Events outside Australia are having a far greater influence on the Aussie Dollar than anything from within. We had some poor housing and retail sales data from Australia earlier in the week but that was largely ignored as investors preferred to focus on the slightly improved tone from the Eurozone.
That gave some cause for optimism which was all it took to strengthen the Aussie Dollar from the test of 1.60 against the Pound on Friday to a low of 1.52 we saw on the dip on Wednesday.
Things have stabilised a little but the Australian Dollar is on the front foot and the Pound is suffering from concern over the state of the UK government’s finances.
Another test of the 1.52 bottom of the range looks inevitable and perhaps a push below 1.50 is also pretty certain. The momentum is taking this pair lower at the moment and there is a chance of 1.47 in the short term.
Those with Australian Dollars to sell are probably whooping and skipping at that prospect but beware of being too confident. The Sterling – Australian Dollar exchange rate is extraordinarily volatile and traders are very fickle so a turnaround is only a heartbeat away.
Thanks to Halo Financial for this Currency Report