Pound v Australian Dollar: GBP extends gains against AUD as retail sales fall

Pound v Australian Dollar: GBP extends gains against AUD as retail sales fall

UK MANUFACTURING PMI might have fallen short of forecasts, but the pound is managing to extend gains against the Australian dollar.

Pound Sterling and Australian Dollars

Watch the GBP closely over the next few months. The GBP is trading in a range and either we will have tremendous moves to the upside (opportunity for going long) or we have a break below the support line (opportunity for going short) and this would be another huge move.

Like with fishing, its best to wait for the moves to present themselves before jumping in. Patience is key to trading and this particular pair, when it moves in either one of these directions is going to trend. So keep an eye out on the news.

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The GBP/AUD exchange rate has bounced back to AU$1.644 thanks to the UK’s latest account report
The GBP/AUD exchange rate hit a low of AU$1.618 last week but managed to bounce back to AU$1.644 thanks to the UK’s latest current account report.Friday’s data revealed that in Q4 of 2016 the current account deficit narrowed from -£25.7bn to -£12.1bn.Given that a spiralling current account deficit was one of the major concerns about the UK’s post-referendum economy, the result gave the pound a boost and GBP also gained on EUR, USD and CAD.
The report was a sign of a move away from debt-based spending and additionally showed the UK coming a step closer to becoming a net lender, rather than a borrower.

Sterling is helping the UK erode the large external imbalance that contributed to the currency’s drop after the Brexit vote

AXA analysts

Analysts at AXA said: “The marked improvement in the current account suggests that at these levels sterling is helping the UK erode the large external imbalance that contributed to the currency’s drop after the Brexit vote.”This should limit downside appetite for the [pound] even as we expect negative headlines from preliminary EU negotiations to mount.”Today’s main UK news was the manufacturing purchasing manager’s index (PMI) for March, which disappointed forecasts.

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