Sean Callow, Research Analyst at Westpac, points out that the Aussie has fallen more than 4% against the British pound since late August on a combination of greater optimism over Brexit negotiations and AUD negatives such as US-China trade tensions and Australian political turmoil.
Key Quotes
“With the RBA firmly on hold, backed by headline GDP growth above 3% and commodity prices grinding higher, AUD has the scope for recovery on crosses in coming months. But in the next few weeks, AUD’s apparent role as proxy for US-China trade relations seems likely to cap rallies. Risks look skewed for a break below AUD/GBP 0.54 or GBP/AUD above 1.85.”
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