Australian Dollar in strong advance against British pound; GBP/AUD @ 1.8291
- Written by: Gary Howes
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The Australian dollar to pound sterling exchange rate is therefore at 0.5467.
(Note, the above are spot market quotes, your bank will affix a spread at their discretion. An independent FX provider will however guarantee to undercut your bank's offer, thus delivering more currency. Please find out more here).
The pound traded within a relatively narrow range against the Australian dollar on Friday, and has fallen back through the course of the London morning session owing to some below-par Service PMI data.
This evening Australian Trade Balance figures will be released, which could also impact this currency pair.
A better-than-expected trade balance figure would give the Australian dollar a further boost against the British Pound Sterling.
Australian dollar strength is fragile
Despite the pro-AUD tone we are seeing we note the Aus dollar remains vulnerable to weakness.
We continue to keep an eye on AUD/USD for guidance on the GBP/AUD rate.
"AUD-strength is fragile fundamentally looking, as RBA wants the Aussie weaker and intervenes accordingly in the FX markets (as confirmed by RBA’s past months official reports)," says Ipek Ozkardeskaya at Swissquote Research.
But the overall year-end risk rally successfully pulled AUDUSD up to 0.9000 through the first week of 2014.
"While traders should keep in mind that this recent strength remains delicate in the longer run, the bullish trend and momentum indicators give us reason to think that 0.9000 is likely to remain in sight in the short-run," says Ozkardeskaya.
According to Swissquote option barriers are placed at 0.8990/0.9000, if breached should revive the AUD-bulls to 0.9042 (23.6% on Oct-Dec pullback). The key resistance is seen at 0.9179 (fibo 38.2% & Dec resistance).
UBS are also bearish on the AUD/USD pairing saying:
"While resistance holds at 0.9035, the pair remains vulnerable to break
through 0.8821 and extend the bearish trend to 0.8545."
