The GBP to AUD exchange rate was considerably weaker as European trading began on Tuesday.
The Pound to Australian Dollar pairing shed 0.35% overnight as investors responded to the Reserve Bank of Australia’s latest interest rate decision and upbeat economic reports from China.
As expected by economists, the central bank opted to leave interest rates unchanged.
The official interest rate was left at 2.5% for an 11th month, and the RBA intimated that rates will be on hold for some time to come.
Although the RBA also warned against the strength of the local currency, its comments had little impact on the Australian Dollar. Governor Glenn Stevens asserted; ‘The exchange rate remains high by historical standards, particularly given the declines in key commodity prices, and hence is offering less assistance than it might in achieving balanced growth in the economy.’
The ‘Aussie’ strengthened against the Pound in the aftermath of the decision and the USD/AUD pairing slumped to its weakest level since November last year.
The Australian Dollar’s gains were aided by unexpectedly upbeat manufacturing data from China.
China’s Manufacturing PMI for June rose from 50.8 to 51.0 – moving further away from the 50 mark separating growth from contraction.
A separate measure of manufacturing in the nation, the HSBC Manufacturing PMI, slipped slightly from initial estimates of 50.8 to 50.7 but still remained in growth territory.
As these latest figures confirm that the policy measures introduced by the Chinese government are having the desired effect, they increased the appeal of assets belonging to nations that rely on China for trade, like Australia.
In a statement issued with the report HSBC economist Hongbin Qu asserted; ‘This confirms the trend of stronger demand and faster restocking. The economy continues to show more signs of recovery, and this momentum will likely continue over the next few months, supported by stronger infrastructure investments.’
As the European session progresses the GBP to AUD exchange rate could recover ground if today’s UK Manufacturing PMI comes in above forecast levels. Economists are expecting that the gauge will produce a seasonally adjusted reading of 56.8 in June, down from the 57 level registered in May.
An unexpectedly upbeat report could bolster Sterling and boost the Pound to Australian Dollar exchange rate prior to the release of Australia’s trade balance figures.
UPDATED: 17:00 GMT 01, July 2014
GBP to AUD Fluctuates after PMI
The GBP to AUD exchange rate fluctuated as trading on Tuesday progressed and investors digested an unexpectedly upbeat UK Manufacturing PMI report.
The news that the UK’s manufacturing sector expanded by more than expected in June lent the Pound support and saw the British asset recover ground against its Australian peer.
However, the resilience of the Australian Dollar appears to know no bounds and the GBP to AUD pairing later trimmed gains.
Australia’s trade balance figures could inspire additional GBP to AUD exchange rate movement overnight.
UPDATED: 09:50 GMT 02 July, 2014
GBP to AUD Exchange Rate Rebounds, Aussie Trade Data Flops
The Pound recovered losses against the Australian Dollar overnight, jumping by 0.5%, after Australian trade figures disappointed expectations.
The GBP to AUD exchange rate went on to advance further on Wednesday as both UK house price and construction reports delivered positive surprises.
Australia’s trade data showed that the nation recorded a much larger-than-expected trade deficit in May.
Earlier in the week the ‘Aussie’ had been supported by the Reserve Bank of Australia’s neutral policy meeting and China’s impressive manufacturing figures.
Tomorrow’s Chinese non-manufacturing PMI is likely to cause additional movement in the GBP to AUD exchange rate.
The USD/AUD exchange rate was little changed as investors focused on today’s speech from Federal Reserve Chairwoman Janet Yellen.
UPDATED 23:35 GMT 02/07/2014
GBP to AUD Exchange Rate Holds Construction Gains
The GBP to AUD exchange rate rallied on Wednesday after Australia’s trade data disappointed expectations and the UK’s construction figures wildly exceeded expectations.
As both UK Manufacturing and Construction PMI have come in above forecasts this week, economists will be hoping for a hat trick of figures when the UK publishes its Services PMI tomorrow.
Meanwhile, better-than-expected US ADP Employment Change figures helped the US Dollar strengthen against its Australian counterpart.
Overnight Australia’s AiG Performance of Services index could impact the GBP to AUD exchange rate, as could China’s non-manufacturing and services PMI – also due out during Australasian trading.
The Pound to Australian Dollar exchange rate hit a high of 1.8197 on Wednesday.
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, 0.9455,
Australian Dollar,,Euro, 0.6905,
Australian Dollar,,Pound, 0.5527,
Australian Dollar,,New Zealand Dollar, 1.0795,
US Dollar,,Australian Dollar, 1.0579,
Euro,,Australian Dollar, 1.4483,
Pound Sterling,,Australian Dollar, 1.8090,
New Zealand Dollar,,Australian Dollar, 0.9265,
[/table]
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