GBP/AUD is now trading at a 6-week high following extraordinary UK retail sales, boasting their highest spike since 2002. Pound to Australian Dollar exchange rates peaked at 1.67268 and remain above 1.67 at the time of writing.
Overnight Australian employment figures were released and whilst growth was recorded, the release came in much weaker than market expectations of 20,000 (9,800 MOM).
GBPAUD could hit 1.70 in the weeks ahead
Unless further advances emerge on the Brexit side, Pound to Australian Dollar rates could continue in Sterling’s favour as markets gear up for the FED to hike rates in December. Whilst the apparent victory for Trump has spooked markets, noticeable the Asian markets, spectators are still expecting a hike to come as early as December, which is likely to result in AUD weakness.
Trump victory concerns linger in China
Concerns in China remain following a Trump victory and given his previous comments surrounding the Chinese economy, as well as his campaign message of imposing higher tariffs from overseas imports, implications for the Australian Dollar could emerge.
Australia’s major player for its exports is China, and if concerns continue to linger in Asia this could cripple Australian exports putting a dent in their GDP.
Hopes for a UK-US trade deal could bolster the Pound
Rumours have now speculated that Nigel Farage could be an important player in the new Government as his links to the Trump administration could help the UK during its Brexit challenges. If the UK are able to enter talks with the Presidential elect ahead of Article 50, then Sterling could find some support as some of the uncertainty is removed. I personally expect GBPAUD to hit 1.70 before the end of November presenting good opportunities for Australian Dollar buyers.