The pound has reversed recent losses against the aussie, supported by rising risk aversion

The pound lost another 1.0% to the aussie dollar on Friday to close at 1.8373, as selling pressure remained strong.

  • The aussie dollar reached a twenty-four year high against the pound on Friday, as King’s comments continued to weigh heavily on the pound.
  • On Thursday, the BoE governor made it clear that he was not too concerned about the current weakness of the pound, and that he was in fact in support of its current value in order encourage a rebalance towards an export led economy.
  • The news reaffirmed that interest rates would remain low for some time, which encouraged investors to sell the pound in favour of the high-yielding aussie.
  • In trading this morning however, the aussie has capped its gains as weaker Asian stocks, soften demand for the Australian currency.
  • Rising risk aversion has also sent the price of gold back below $1000 per ounce, which has put further pressure on the aussie, with pair currently trading steadily around Friday’s closing price.