GBPAUD was higher by 0.80% on the day after Australian retail sales numbers came in at -4%. This was slightly better than the -4.2% expected but still an underwhelming number for a country that relies on the services and consumers for a large part of the economy.
Boris Johnson was set to hold a video call with European Commission head Ursula von der Leyen a day after she formally announced legal proceedings against the U.K. for its Internal Markets Bill, which threatened to alter the original agreement between the EU and Britain. The country’s two chief negotiators also meet today but there is still issues in resolving fishing rights and state aid rules. The two countries need to have an agreement in place before the October 15th meeting. This will keep the pound at risk over fears of a No Deal Brexit.
Australia has been given a boost by the news that the Trans-Tasman bubble between the country and New Zealand is finally set to open. Passengers could be flying between the two countries as early as November and this will be a boost to tourism and business travel for both countries.
Next week will see Manufacturing PMIs from Australia but the key event will be another Reserve Bank interest rate decision. Aussie rates have been at 0.25% since they were slashed in March. The bank’s governor Philip Lowe had said the current rate would likely be a base but the latest inflation reading was -0.3% and we can’t rule out a rate cut when the rest of the world is eager to have rates near zero.
GBPAUD was trading near 1.8100 after testing the 50-day moving average and this will be immediate resistance. The larger range in the pair is between 1.8400 and 1.7570 but there is support and resistance levels between those prices. The Investing Cube team is currently available to assist all levels of traders with a Forex Trading Course or one-to-one coaching.
