As the Scottish citizens make their final votes in favour or against independence, the Pound is likely to be subject to strange movement. Despite the majority of analysts expecting the Scots to vote against independence, anxieties are still high; as evidenced in the Australian Dollar to Pound exchange rate which has been quite changeable since the European session commenced.
The Australian Dollar to Pound Sterling exchange rate is currently trending in the region of 0.5500.
Those invested in the ‘Aussie’ (AUD) have had a rough ride of late with a succession of issues holding back sustained gains. The commodity-correlated currency is highly sensitive to changes in commodity values, which have plummeted off the back of data from China and the US which indicated that supply outweighs demand.
On Wednesday, however, the ‘Aussie’ was significantly boosted by an announcement made by the People’s Bank of China. The Chinese Central Bank said that they are going to inject US$81 billion into their largest banks in the hope of countering the economic slowdown. This ignited hopes of improved trade between China and Australia, and the ‘Aussie’ firmed up as a result.
British data on Wednesday was relatively mixed. Average weekly wages showed the smallest growth since comparable records began, but unemployment saw a positive declination to 6.2%. The lack of correlation between wages and inflation will act as a barrier to near-future benchmark rate revisions.
The Bank of England also published the minutes from their most recent monetary policy meeting. The minutes revealed that the two BoE hawks had, once again, dissented from Governor Mark Carney’s stance on monetary policy. This enabled Sterling to make some gains against its most traded currency peers.
The Australian Dollar to Pound Sterling exchange rate has hit a low today of 0.5491.
With a lack of influential data on Thursday the ‘Aussie’ has weakened against many of its major peers. The Federal Reserve’s decision to reduce the timing of a future rate hike has also aided the Australian Dollar’s downtrend.
Continued issues regarding commodity prices haven’t done the ‘Aussie’ Dollar any favours. Interdealer Icap announced a complete withdrawal from direct trading in Australian agricultural and soft commodities with immediate effect. Brad Howell, Icap Australia’s chief executive officer, said in an emailed statement; ‘Icap will be pulling out of its direct market activity across grain, wool, cotton and commodity futures offerings’.
Thursday’s British retail sales data failed to meet with the market consensus, but did at least improve upon the previous figures. Yearly Retail Sales incl. Auto was forecast to rise from 2.5% to 4.0% but only managed an increase to 3.9%.
The Australian Dollar to Pound Sterling exchange rate has reached a high today of 0.5514.
UPDATE
With the Pound strengthening across the board in response to the news that the United Kingdom won’t be divided for the time being, the Australian Dollar to Pound Sterling exchange rate fell to its lowest level for nearly six months.
There were no notable Australian reports to bolster the ‘Aussie’ overnight and the currency was also trending lower against the US Dollar in the face of yesterday’s impressive jobless claims figures.
As the weekend approaches the Australian Dollar to Pound (AUD/GBP) pairing is likely to continue trading in the region of 0.5439.
