The month of August is traditionally challenging for GBP\/USD and AUD\/USD, yet this year both pairs have experienced an upward trend. As of the beginning of August, GBP\/USD increased by 1.8% and AUD\/USD by 1.5%. Historically, GBP\/USD has recorded only six positive August months since 2004, while AUD\/USD has seen four over the last 20 years.<\/p>\n
Both pairs posted positive August returns in 2024 and seem poised to replicate that in 2025, despite their usual performance. Seasonal trends are often important, yet current developments in the market are exerting considerable influence. The recent decline in the dollar, following a disappointing US labour market report, has brought forward expectations of Federal Reserve rate cuts, impacting both currency pairs.<\/p>\n
The Bank of England made a hawkish rate decision, though a pause is anticipated for September, with possible cuts in November. Additionally, improved risk sentiment has bolstered the Aussie, supported by upbeat equity markets. Looking forward, the upcoming US CPI report will be pivotal in shaping the dollar’s trajectory. It is expected to influence the remaining trade dynamics for August, and will be closely monitored by market participants.<\/p>\n
August is typically a weak month for the pound and the Aussie dollar against the US dollar. Looking back since 2004, GBP\/USD has only managed to post gains in six Augusts, while AUD\/USD has only done so four times. However, following a positive showing in August 2024, both currencies are starting this month strong once again.<\/p>\n
The main factor we see driving this is the weakness in the US dollar, which traders should watch closely. The US labor report from last Friday, August 1st, was poor, showing job growth of only 95,000 and an unemployment rate ticking up to 4.2%. This has fueled market expectations that the Federal Reserve will have to cut interest rates soon to support the economy.<\/p>\n
For traders looking at the pound, the Bank of England’s recent decision creates a distinct opportunity. While the BOE did cut its rate yesterday, the 6-3 vote showed significant dissent, suggesting a possible pause in rate cuts come September. This contrasts with the growing expectation of rate cuts from the US Fed, which could continue to support GBP\/USD.<\/p>\n
Meanwhile, the Australian dollar is being lifted by a better mood in global markets, something derivative traders must consider. The prospect of Fed rate cuts has been treated as good news by the stock market, with the S&P 500 rallying 2.1% since last Friday. This positive risk sentiment is currently outweighing concerns about the Reserve Bank of Australia, which is widely expected to cut its own interest rate next week.<\/p>\n
Our immediate focus must be on next week\u2019s US inflation data, the Consumer Price Index. Another soft reading would confirm the weak economic picture painted by the labor report and likely accelerate the dollar’s decline. This report will be pivotal in shaping trading strategies for the remainder of August.<\/p>\n
Create your live VT Markets account<\/a>\u00a0and\u00a0start trading<\/a>\u00a0now. <\/b><\/p>\n","protected":false},"excerpt":{"rendered":" GBP\/USD and AUD\/USD defy seasonal weakness, rising on dollar decline and shifting central bank expectations in August.<\/p>\n","protected":false},"author":62,"featured_media":17035,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[59],"tags":[],"class_list":["post-28595","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-live-updates"],"acf":{"acf_article_selection_author":null},"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28595","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/users\/62"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/comments?post=28595"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/posts\/28595\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media\/17035"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/media?parent=28595"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/categories?post=28595"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.com\/en-ca\/wp-json\/wp\/v2\/tags?post=28595"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}