Will the downward trend continue from here?

GBP/AUD is still trading below the key 1.70 level, and this is despite some better than expected Inflation Data coming out of the UK yesterday boosting the Pound.

Sterling has been under considerable pressure ever since the Brexit vote with GBP/AUD levels dropping to 3 year lows, making it a good time to repatriate Aussie Dollars back into Sterling as it’s been some time since Aussie Dollar sellers would receive this many Pounds for their Australian Dollars.

The Pound has been facing further pressure since the 4th of August, which was when the Bank of England’s MPC (Monetary Policy Committee) announced that it would be cutting interest rates down to 0.25% and also introducing an additional £80bn worth of Quantitative Easing.

This additional amount of Pounds in circulation coupled with the negative sentiments towards the Pound at present have piled further pressure on the Pound, pushing the GBP/AUD pair below 1.7000 and as low as 1.67462 last week.

Inflation Data out of the UK yesterday came out slightly above analysts’ expectations when we look at the figures on an annual basis, and although it has pushed Sterling up somewhat the GBP/AUD pair are still trading below 1.7000 which is a key psychological level, that could act as an upper limit as today’s high is 1.7007 so far which would imply that the level is acting as a resistance so far.

UK employment data for the UK

This morning will be the release of UK Unemployment Data and Average Weekly Earnings figures which will provide us with an indication of how the UK economy is performing since it was first announced that the UK will be leaving the EU, so I expect these figures to be watched closely by investors, and I think we could see some movement within GBP/AUD exchange rates this morning.