AUD/GBP update and comments

In a mid September 2022 edition of my weekly periodical titled, ‘Macro Extremes’, the AUD/GBP appeared in the quinella overbought section as it sported a simultaneous weekly RSI reading above 70 and it traded to 2.5 standard deviations above its weekly mean.

What made the pending decline (back towards its 200 week moving average) is that it was trading at 10% above that measure.

Things start looking ‘stretchy’ in FX markets at those points.

That trifecta made it difficult to argue that the Aussie Dollar could become any more stronger against the British Pound.

Around about then, was when you sold AUD and bought GBP.

This was when I was advising corporations needing to pay for GBP denominated equipment, to buy Sterling.

Today….its not far away from reverting back to around the 0.5470 mark, as it meanders most likely back to 0.5315 (+ / – 30 basis points) 

When you see the the AUD/GBP at 0.5315, tell your British relatives to convert Sterling into Aussie and send money your way.

Or U.K. corporations may choose to consider cheaper Australian assets.

Look out for upcoming extremes in my weekly (Sunday) publication of Macro Extremes.

December 16, 2022

by Rob Zdravevski

rob@karriasset.com.au