Sterling continues to slide ...

Sterling has continued it slide against the Australian dollar, reaching a 27 year low during January 2011.  The chart below shows monthly average exchange rates over the last 20 years - the AUD is very much above the long term "average" rate but the question is whether there is a new paradigm in place. With the UK continuing to print more money (i.e. "quantitative easing") it's not hard to see the AUD continuing it's relative strength .. subject to a significant weakening in commodity prices and/or the Chinese economy.