Aussie made significant gains at the end of last week and is continuing to advance this morning

In trading on Friday, the pound slipped back from two-week highs around the 1.8000 level against the aussie as a weak GDP figure dulled demand for the UK currency.

  • A report showed that the UK failed to exit the recession in the third quarter of this year, giving the central bank more reason to keep enacting emergency measures to spur growth.
  • The data showed that the UK contracted by a further 0.4%, disappointing expectations of a 0.2% expansion and firmly halting the pound’s progress.
  • Where as in Australia interest rates have already been raised on the back of growing confidence in the economy, the UK may now be considering further loosening its monetary policies as recovery struggles to take hold.
  • In trading this morning, the pound continues to fall, currently down 0.4% after the aussie received a boost from a Chinese report that suggested authorities were looking to diversify the country’s foreign exchange reserves.
  • The report suggested that China may look to buy up euro’s and yen, which analysts said could also spill over into the aussie providing further demand.