With disappointing domestic data upping the odds of the Reserve Bank of Australia issuing a rate cut next month the ‘Aussie’ tumbled to an almost three-year low against the US Dollar during the local session. The South Pacific asset also lost ground against the Euro, but was able to hold steady against a broadly softening Pound.
The Australian Dollar exchange rate was trading in the region of 0.5910 against the British Pound as of 10:00 am GMT
A report showed that Australia’s export price index fell by 0.3 per cent in the second quarter, rather than rising the 0.3 per cent expected.
Separate data revealed that Australia’s performance of manufacturing index slipped from 49.6 in June to 42.0 in July.
However, as Australasian trade progressed a pleasantly surprising manufacturing PMI figure for China helped the South Pacific asset recoup losses.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate hit a low of 0.5869
Although economists had forecast that China’s manufacturing PMI would post contraction in July, dipping from June’s 50.1 to 49.8, the pace of expansion actually increased and the gauge rose to 50.3.
The result, and the ‘Aussie’s subsequent movement, prompted this response from currency researcher Callum Henderson: ‘The initial reaction to the Chinese PMI was very positive for risk, particularly for the Aussie. We’ve been bearish medium-term on the Aussie for quite some time. The weakness in the currency is due both to domestic and external factors.’
Similarly, Wellington-based industry expert Mike Jones stated: ‘The market is still in a mood to sell rallies in the Aussie, particularly with RBA rate-cut expectations still ramping up. We don’t think enough easing is priced into the curve. Given this, we suspect bounces in the currency will be short-lived.’
While US news will once again be a major driver of market movement today, the ‘Aussie’ could experience further fluctuations before the weekend as a result of the release of Australia’s producer price index, due out tomorrow at 02:30 GMT.
AUD/GBP volatility is also likely to result from today’s Bank of England rate decision.
Current Exchange Australian Dollar (AUD) Rates
< Lower > Higher
The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.8970 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6775 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5910 >
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1258 >
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.1156 >
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4760 <
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.6915 <
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8875 <
Correct as of 10:00 am GMT
Comments are closed.