The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate remained stronger on Monday after the currency was buoyed by better than forecast UK Manufacturing PMI data and the ‘Aussie’ was weakened by disappointing domestic and Chinese data.
Sterling also advanced against other currencies such as the Euro, US Dollar, Australian Dollar and other major peers.
Over the weekend, the ‘Aussie’ came under pressure after data released in China showed that the world’s second largest economy’s manufacturing sector saw its growth slow. A separate report showed that the Asian giant’s service sector slowed to a nine month low.
According to the China Federation of Logistics and Purchasing, which issues the data with the National Bureau of Statistics China’s official Manufacturing Purchasing Managers’ Index dropped to 50.8 in October from 51.1 in September,
The index, released at the weekend, remained above the key 50 level, which separates expansion from contraction compared with the previous month, but was below expectations.
Confirming the slowdown in Australia’s largest trading partner was data released early on Monday, which showed that China’s Non-Manufacturing Purchasing Managers Index (PMI) fell to a reading of 53.8 in October, down from the 54 recorded in September. The cause for the drop was a cooling property market.
Also dragging the Australian Dollar lower was the release of disappointing domestic data which showed that approvals for building new homes in Australia tumbled by 11% in September. According to the Australian Bureau of Statistics, building approvals dropped by 13.4% on an annual basis.
GBP/AUD Exchange Rate Advances on UK PMI Data
The Pound advanced strongly against several major peers later in the morning following the release of stronger than forecast UK manufacturing PMI data.
According to the Office for National Statistics, the UK Manufacturing PMI advanced to a reading of 53.2 from the previous month’s figure of 51.6. Economists had been expecting the number to slow to a reading of 51.2.
The better-than-expected data shows that the UK is continuing to outpace its European neighbours despite a drop in overseas demand.
‘The pickup in growth mainly reflected the resilience of the domestic market, as overseas demand was impacted by the ongoing economic crisis in the Eurozone and the EUR/GBP exchange rate,’ said Markit in a statement.
Following the data’s release, the Pound advanced back above the 1.280 level against the Euro and strengthened by 0.62% against the Australian Dollar to trade in the region of 1.828. It also made slight gains against the buoyed US Dollar.
GBP/AUD Exchange Rate Softens ahead of Bank of England Meeting
The Pound Sterling to Australian Dollar exchange rate weakened on Thursday as investors turned their attentions to the Bank of England’s policy meeting.
Economists were widely forecasting that BoE policy makers would choose to leave interest rates unchanged at the record low level of 0.5% and strengthen their resolve to leave rates unchanged until next year.
Concerns over slowing growth and the stagnation in the Eurozone is expected to keep the BoE cautious for the foreseeable future.
The ‘Aussie’ meanwhile received some support from better than forecast employment data but remains under reassure from falling commodity prices and a slowdown in China.
