The Australian Dollar (AUD) followed other major currencies higher against the Pound (GBP) on Monday as the currency market was spooked by newspaper poll, which showed that the pro-independence Yes campaign has taken the lead in the run up to the September 18 vote.
Last week the Pound slumped sharply as a different poll showed that the referendum vote will likely be a close run thing but Sunday’s poll created renewed concerns as it marked the first time ever that the Yes campaign was looking likely to win.
Sterling has declined by more than 6% against the ‘Aussie’ over the past two months and is 10% lower than its peak in late January.
The poll released over the weekend showed that 47% of those polled said that they would be voting in favour of independence, whilst 45% said they would vote no whilst the rest said that they were undecided.
Investors are also betting that a “yes” vote could lead to a complex currency union between Scotland and the rest of the UK and affect confidence in UK government bonds. Some economists have dismissed this.
‘The position of England and the rest of the union is we won’t share a currency with you; if you want to peg to us then that’s up to you. Therefore, Scotland would still have to issue and print its own currency,’ said David Buckle from Fidelity Worldwide.
Also weighing upon the Pound was the publication of a report, which showed that house prices in the UK fell in August. Prices eased from the 1.2% increase seen in July to 0.1%.
According to economists, the Pound is the world’s worst performing major currency today with only the likes of the Afghan afghani, Sierra Leones leone and the Vanuatu vatu having a worse session.
Australian Dollar to Pound Sterling exchange rate forecast
The Australian Dollar also found support against the Pound after economic data showed that the number of jobs advertised in the South Pacific nation increased by 1.5% last month. The figure added to the preceding month’s figure of 0.5%.
That figure was revised higher from 0.3%.
Also offering the ‘Aussie’ support was data released in China, which showed that the world’s second largest economy saw its trade surplus widen unexpectedly in August. The nation’s trade surplus widened to $49.8 billion from July’s figure of $47.3 billion.
The report showed that exports increased at an annualised rate of 9.4% last month, beating economist expectations for a rise of 8%.
Investors will be keeping an eye on the latest Australian confidence and employment data due for release later in the week.
Strong figures from those will see the ‘Aussie’ strengthen further against the battered Pound.
The UK currency is highly likely to remain under significant pressure until the outcome of the Scottish referendum vote is announced.
UPDATE
The Australian Dollar to Pound Sterling exchange rate is currently trending in the region of 0.5757.
Monday’s Chinese imports data has spelled disaster for the Australian economy and demand for the ‘Aussie’ (AUD) has continued to dissolve. Yearly Chinese Imports were expected to rise from the previous figure of -1.6% to 3.0%, but the actual data showed a heavy decline to -2.4%. The lack of Chinese demand for iron ore imports has seen the price of the commodity fall by over US$10 per tonne, and Australia are certainly feeling the pinch.
‘Aussie’ troubles have continued on Tuesday morning after Australian economic data printed relatively negatively. AUD Home Loans showed a 0.3% growth having been forecast at 1.0% and the NAB Business Confidence dropped to 8 having hit 10 previously.
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,0.9355 ,
Australian Dollar,,Pound Sterling,0.5807 ,
Australian Dollar,,Euro,0.7226 ,
Australian Dollar,,New Zealand Dollar,1.1248 ,
US Dollar,, Australian Dollar ,1.0688 ,
Pound Sterling,, Australian Dollar ,1.6109 ,
Euro,, Australian Dollar ,1.3837 ,
New Zealand Dollar,, Australian Dollar ,1.1249 ,
[/table]
