While the Pound was holding steady ahead of the release of UK industrial/manufacturing production data, the Australian Dollar modestly declined against its British peer in response to a disappointing business confidence report, leaving the Pound to Australian Dollar exchange rate is in the region of 1.7859.
Australian economic data has been patchy over the last few months as the mining boom which fuelled domestic growth peters out, and today’s report is indicative of ongoing concerns.
Although a measure of business conditions pushed higher in March (advancing from -0.1 to 0.7) the figure remains subdued and the NAB gauge of business confidence dropped from 7.3 to 4.1 last month.
NAB’s chief economist said of the result; ‘Business conditions rose only slightly in the month and are still pointing to a sluggish recovery in business activity. Trend business conditions have improved since mid-last year as lower interest rates and the Australian Dollar helped to support activity, but have given up some of these gains recently. Conditions facing wholesalers deteriorated heavily in March and are by far the weakest of all the industries covered in the survey – a concern given its characteristics as a bellwether industry.’
He added; ‘Australian business conditions remained soft and there are signs the weak environment is taking a toll on business confidence. Labour market indicators still look too soft to prevent a further deterioration in the labour market’.
The ‘Aussie’ may have softened slightly against the Pound in the wake of this data but the South Pacific asset continued trading close to a five-month high against the US Dollar.
The Australian Dollar fluctuated against the Euro and its New Zealand counterpart.
During European trading the GBP to AUD pairing extended gains as UK manufacturing and industrial production figures exceeded expectations.
The Pound broadly strengthened after a report revealed that UK industrial production increased by 0.9 per cent in February month-on-month, considerably more than the 0.3 per cent monthly gain anticipated.
Similarly, manufacturing production jumped by 1.0 per cent on the month. An increase of 0.3 per cent was forecast.
However, Pound gains were a little restrained ahead of the release of today’s UK NIESR GDP estimate for March.
Overnight additional GBP to AUD movement could occur as a result of Australia’s Westpac consumer confidence index.
Domestic home loans data may also be of interest. Another disappointing result could see the Pound’s bullish relationship with the Australian Dollar continue.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar, 0.9317,
Australian Dollar,,Euro, 0.6770,
Australian Dollar,,Pound, 0.5599,
Australian Dollar,,New Zealand Dollar, 1.0766,
US Dollar,,Australian Dollar, 1.0733,
Euro,,Australian Dollar, 1.4763,
Pound Sterling,,Australian Dollar, 1.7859,
New Zealand Dollar,,Australian Dollar, 0.9295,
[/table]
Comments are closed.