On Friday the Pound held its own against the Australian Dollar and GBP to AUD pairing prepared to end the week on a high.
During South Pacific trading Australian data showed that domestic producer prices advanced by more than forecast in March, climbing 0.9 per cent rather than the 0.6 per cent anticipated. On the year Australian PPI was 2.5 per cent higher.
A separate report revealed a strong increase in Australian new home sales in the first three month of the year. New home sales surged by 5.8 per cent in the first quarter after edging up by 0.2 per cent in March.
Diwa Hopkins, a Housing Industry Association economist, said this of the data; ‘Strong results occurred in the areas where a new housing recovery is just gaining traction.’
However, after these figures were published the Australian Dollar continued trading lower against the Pound and US Dollar.
During the European session the GBP/AUD pairing consolidated its advance even as the UK’s construction PMI slipped by more than projected.
Given that UK construction output rose at the beginning of the year due to storm-related damage, economists had anticipated a decline in construction PMI in April.
But while a drop from 62.5 to 62.2 was forecast, the measure actually tumbled to a six-month low of 60.8.
David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said this of the report; ‘While the rate of growth slowed slightly in April, the construction sector is still experiencing a remarkably strong and consistent period of expansion. Positive news abounds as housing activity reached a near ten-year high and the sector as a whole benefited from the sharpest rise in new business since January this year’.
The Pound remained stronger against the Australian Dollar, US Dollar and Euro as the local session progressed.
The British asset failed to advance on the New Zealand Dollar however, despite a measure of New Zealand’s commodity prices declining by 4.0 per cent in April. The GBP to NZD exchange rate is currently trading around 1.9585.
Later today some Pound to Australian Dollar movement could be caused by the US non-farm payrolls figure. A negative surprise may inspire a bout of risk aversion and weigh on higher-risk currencies like the ‘Aussie’, but a surprise to the upside could bolster commodity-driven and emerging-market assets.
Tomorrow’s Chinese non-manufacturing PMI could well have an impact on the GBP/AUD exchange rate, but investors will also be looking ahead to next week’s key Australian data releases, including the AiG performance of service index, Oz trade figures, the Reserve Bank of Australia’s rate decision, domestic retail sales, Australian employment data and the RBA’s policy statement.
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, 0.9269,
Australian Dollar,,Euro, 0.6679,
Australian Dollar,,Pound, 0.5487,
Australian Dollar,,New Zealand Dollar, 1.0713,
US Dollar,,Australian Dollar, 1.0803,
Euro,,Australian Dollar, 1.4949,
Pound Sterling,,Australian Dollar, 1.8222,
New Zealand Dollar,,Australian Dollar, 0.9310,
[/table]
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