The AUD built on the gains made against the Pound from previous weeks. Traders needing to buy GBP on 14 April would have done so at a year high rate of 0.541. This represents a gain of close to 20% from the year low in early September.
A number of analyst’s attributed the continued weakening of the GBP to ongoing uncertainty around the upcoming “Brexit” decision. News that the UK’s budget deficit was larger than expected, combined with the UK inflation rate hitting a 15 month high, also put downward pressure on the GBP.
The Aussie Dollar was range-bound against the USD last week. Traders buying American Dollars on 13 April got the best of the market with the exchange reaching a weekly high of AUD – USD 0.771. This was up considerably from a low of 0.749 earlier in the week.
When explaining the AUD strength, analysts cited stronger than expected economic data releases this week across a number of key Australian sectors. This comes despite the ongoing weakening of the Australian mining industry and weaker than expected Chinese Consumer Price Index announcement.
The nascent turnaround in commodity prices could result in many re-evaluating their position that the AUD is set to decline in the near future. Higher commodity prices, if sustained, would result in growth for the Australian economy which would lead to a stronger AUD.
– Jason Chown