• GBPAUD exchange rates continue their two week high
• Quiet week for AUD could benefit Sterling
• Exchange rates to hit 1.75?

GDP estimates for Q2 could help Sterling

A quiet week for economic data could help Sterling, the only significant release comes on Friday in the form of GDP estimates for Q2. Given the recent strong performance in retail sales, strong British weather and the Olympics I am not expecting any negative results from the release. Looking further afield, is there an argument that Sterling could recover further? #

Economic releases to date since Brexit do not paint the full picture. It can take months before we start to see the impact of Brexit, and given how well the UK was performing prior to the vote, we could in fact have another 2-3 months of positive data before the true impact of Brexit leaks into the economy.

I am therefore expecting further strength for Sterling in the foreseeable, as long as Article 50 remains at bay whilst the UK prepares for the negotiation table.

Will the RBA cut interest rates again

The strength of the Aussie Dollar is of major importance to the economy given its net export status. The last time the RBA cut rates the currency rebounded from its losses rather rapidly. Could the RBA cut rates again?

Interest rates in Australia are some of the highest in the world against most of its major counterparts, during times of economic or political turmoil investors look to riskier currencies with higher returns. We may in fact see a surge in the Australian Dollar during the US elections this year.

It is therefore possible a further rate cut could be on the cards, but this needs to be balanced against the potential losses for Sterling if the government trigger Article 50.

In the very short term, whilst GBPAUD exchange rates could improve, making a transfer in the coming weeks could be a crucial decision, especially given the rumours that Article 50 may happen as early as April 2017.