Currency - GBP / Australian Dollar

The Pound has had a terrific period of strength in the last few weeks. Had we started from a better level, those needing to buy Aussie Dollars would probably be plating their vuvuzelas through the night and annoying every neighbour they have. Mind you, if you plan to move to the other side of the world, there has probably never been a safer time to upset the neighbours but I digress. The main reasons for the fall of the Australian Dollar is the news that China; a key export market for Australia, is planning to reduce the pace of its economic growth. That would reduce demand for Australian exports and that has a knock on effect in the employment, retail spending and housing sectors.
Having sprung from A$ 1.62 to over A$ 1.79, the Pound fell back on Friday when poor UK manufacturing and industrial output data damaged the market view of the UK economy. Hover the pound appears to have consolidated its position at around A$1.70 to A$ 1.73. If we remain above the A$ 1.70 target, then another rally could well be on the cards. However, a break of this level opens the possibility of a fall to the previous market cap at A$1.67. There is plenty of data due this week to keep the markets guessing and there is always the chance of another spike back up above A$ 1.75 as rumour and speculation take their toll on the markets. Trading the market when it is this volatile is best done through overnight orders which work in the 24 hour market activity.