Pound sterling cracks through 1.5 ceiling against Australian dollar once more

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Category: Australian Dollar News

Written by Sam Coventry

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"Sterling helped itself to a one-cent gain, taking it to more than a two-week high against the AUD" - Richard Driver at Caxton FX.

The pound has surged against the Australian dollar this morning, recapturing the 1.5 level - a psychological important level for those involved in the FX markets that have an eye on this pair.

Driving the AUD’s sell-off this morning has been comments from the Australian Treasury, indicating there is plenty of scope for RBA interest rate cuts to ease the strength of their currency.


AUD/USD has fallen sharply back from the 1.05 level, leaving the Australian dollar weak across the board.

"So despite positive rhetoric from Europe and another risk-on Asian session, sterling helped itself to a one-cent gain, taking it to more than a two-week high against the AUD. This pair trades at 1.5050 and should climb further today," says Richard Driver at Caxton FX.

Meanwhile sterling was range-bound against the New Zealand dollar, with the latter supported by brighter market sentiment.

Merkel’s comments lent the kiwi dollar some support yesterday, as did some stronger than expected NZ producer prices last night. Because expectations for the US economy have been lowered to such an extent, weak US data is not really damaging risk appetite. Rather it is stoking hopes for QE3 from the Fed, which is to the benefit of the kiwi dollar. Yesterday’s poor US manufacturing data was an example of this.

"Sterling is trading up towards 1.9450 and the risks continue to be skewed to the upside here," says Driver.