GBP/AUD: GBP-AUD In Fresh Declines on Thursday, No Stopping the Aussie

By Will Peters

The Aus dollar (AUD) is the strong-man of the global foreign exchange market place at present and the GBP is now forced into the 1.70's as a result./h2>

The outlook for the pound to Australian dollar exchange rate has deteriorated further over the past week with an increased sense of momentum being enjoyed by the broader AUD complex.

As a result of this strength we have since seen the pound sterling to Australian dollar rate fall below 1.8.

The rate is 0.22 pct lower on a day-to-day basis in Thursday morning trade in London having reached 1.7942.

The outlook suggests further declines.

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The AUD entered today with momentum on its side, but renewed buying occurred as focus turned to the more positive comments from RBA Governor Stevens that reiterated the contribution that a weaker currency would have.

Sterling remains on the back foot and therefore we expect lower levels today.

Why is the Aus dollar stronger?

In Australia, RBA Governor Stevens seemed little concerned about AUD levels.

Stevens said that lower AUD since April should help the economic recovery, while being ambiguous about AUD’s future path.

Stevens also claimed the shift away from mining has started and there are early signs of improvement in hiring and business confidence.

"Comments triggered AUD-USD rally to 0.9201, slightly lower than a 0.9209 Fibonacci 50% target on Oct’13 – Jan’14 pullback. Bullish momentum accelerated. Traders see buying interest above 200-dma (currently at 0.9138)," notes Ipek Ozkardeskaya at Swissquote Bank.

Elsewhere, AUDNZD breaks above Feb-Mar downtrend top and tests the 50-dma (1.0707).

"Given the strengthening bullish trend, we see further room on the upside and place the key resistance at 1.0855 (100 dma & broad downtrend channel top (Feb’13-Mar’14))," notes Ozkardeskaya.