Pound Exchange Rate in Technical Rally – Rises against Australian Dollar (GBP/AUD)06 September 2017 by FC Exchange
The pound was able to claim gains against a host of other currency majors this week, including the Australian dollar (GBP/AUD), on a technical rally. Investors favoured sterling’s short position, pushing it higher. The pound breached the 1.30 key psychological level versus the US dollar (GBP/USD) with some industry experts suggesting sterling’s breach could encourage further gains.
The US dollar wasn’t helped when Tuesday’s Stateside trading saw Federal Reserve policymaker Lael Brainard suggest that inflation was struggling to meet the central bank’s 2.0% target and therefore hopes of another rate hike may be pushed off the table.
Both the US dollar and Australian dollar have felt the impact of North Korean tensions of late. With threats of conflict escalating, markets have been in risk-off mode, heading for safe-haven assets such as the Japanese yen, Swiss franc, and interestingly, the euro.
South Korean President Moon Jae-in stated that the situation on the Korean peninsula was becoming ‘uncontrollable’. He continued: ‘The situation has become very serious due to North Korea’s repeated provocations.’
Meanwhile, Australia’s gross domestic product (GDP) reading came in softer than expected on Wednesday, remaining at 1.8% on the year in Q2, rather than climbing to 1.9% as forecast. Q2 alone showed solid growth of 0.8%, just a little shy of the 0.9% economists had expected, but a marked improvement on the 0.3% in Q1.
The pound is currently trending 0.28% higher versus the Australian dollar, at levels of 1.6328.
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