We have to resort to long term charts to get any picture of what is going on with the Sterling - Australian Dollar chart. This pair fell to test the bottom of a trading range which has existed since 2006 after the Reserve Bank of Australia raised the base interest rate to 4.0% and after very strong employment and housing data. You would have to be a Gobi Desert hermit not to know that the Australian economy is amongst a very small handful which have not entered recession and which are exiting the downturn with aplomb. Think China, Canada and Australia and you have probably covered the major ones already.
So, at a time when the UK is in such dire straits and when British government debt is being compared to the embattled Greece, it is hardly surprising that the Sterling - Aussie Dollar exchange rate is at its lowest ebb in 25 years. It is hard to say whether this will get worse before it gets better but the impending UK election and the potential for a hung parliament may well make things tricky for the Pound.
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