The Australian Dollar recovered off earlier lows Thursday after official data revealed a sharp increase in the January trade surplus, which offered support to the Aussie even after other figures showed household spending growth was underwhelming early in the New Year.
The Australian Dollar collapsed into the Wednesday session after official data showed the economy slowing sharply late last year as consumers came close to going on strike, which could mean a 2019 Reserve Bank of Australia (RBA) rate cut is all but a done deal.
Pound Sterling is configured for further advances against the Australian Dollar on a technical basis, but the two key fundamental risks to keep in mind are a potential parliamentary vote on the Brexit deal in the UK and the Reserve Bank of Australia's March policy meeting.
The Pound-to-Australian-Dollar rate continued to hover close to a four-month peak on Friday but there are still better days ahead for the exchange rate, according to analysts at Australia & New Zealand Banking Group (ANZ), who say Sterling will hit a post-referendum high against the Aussie this year.
The Australian Dollar weakened on Thursday in response to signs of a further contraction in the Chinese manufacturing sector during February, which has helped the Pound-to-Aussie rate to a fresh four-month high, due to fears that China's economic problems will also impact upon the domestic economy.
The Australian Dollar declined in a buoyant market for risk assets Wednesday after official data showed construction sector output falling sharply in the final quarter of 2108, leading to heightened unease among analysts about the likely pace of economic growth into year-end.
The Australian Dollar slipped from recent highs Tuesday as risk-assets softened in the wake of a strong run at the beginning of the new week and as markets renew their focus on domestic drivers of the currency.