The Pound (GBP) to Australian Dollar (AUD) softened on Monday following the release of stronger than forecast trade data from China, which eased some of the concerns over the global economy.
With the US, Canadian and Japanese markets all closed for national holidays we can expect movement in the currency market to be muted and we could see the ‘Aussie’ move more than it usually might on a normal day as a result.
The Australian Dollar advanced against the Pound, US Dollar and Euro after official data out of China showed that the nation’s exports grew at their fastest pace in 19-months last month by rising by 15.3% from the preceding year.
Imports were also shown to have risen by 7% from the same period as last year. Despite the rise, some economists warned that the market should not take the figures as a sign that the world’s second largest economy is strengthening.
Those sentiments appear to have been ignored as the currencies that broadly trade with the Asian nation strengthened.
Of Specific relevance for Australia was that China’s demand for iron ore in September was up 13.1% from August, sparking a dramatic recovery in the share prices of Australian miners. The data also showed that coal imports – another key Australian export to China – were up 12.2% to 21.2 million tonnes.
‘The September trade data suggest that foreign demand remains healthy. Although import growth also rebounded, this should not be taken as a sign that domestic demand growth is turning a corner,’ said Julian Evans Pritchard, China economist for Capital Economics.
Because of the improvement in exports, China’s trade balance saw a surplus of $31 billion, below the $41 billion forecast.
Pound Sterling to Australian Dollar Exchange Rate Forecast
The Pound to Australian Dollar exchange rate is forecast to experience mixed trading throughout the week as volatility in the market remains high on the back of concerns over the health of the global economy and geopolitical events in the Middle East.
If Tuesday’s Australian Business Confidence report comes in stronger than forecast the currency could make further gains. Tuesday’s session will also see the release of inflation data for the UK and a number of data reports from the Eurozone.
Poor UK data could soften Sterling further but if the Eurozone data disappoints economists then we could see the ‘Aussie’ come under pressure from renewed fears over the Eurozone economy. Economic Sentiment out of Germany is likely to fall and Industrial Production across the region is likely to contract.
UPDATE
The Pound Sterling to Australian Dollar exchange rate is currently trending in the region of 1.8311.
Sterling has firmed up against the Australian Dollar on Tuesday after Australian data printed poorly. The NAB Business Confidence decreased from the adjusted previous figure of 7 to 5. NAB Business Conditions also declined from the adjusted previous figure of 3 to 1.
British economic data thus far has also printed negatively. BRC Sales Like-for-Like was forecast to drop from 1.3% to 1.0%, but the actual data contracted to -2.1%.
Sterling is likely to hold in position ahead of the British inflation data due later on Tuesday.
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,0.8731 ,
Australian Dollar,,Pound Sterling,0.5421 ,
Australian Dollar,,Euro,0.6885 ,
Australian Dollar,,New Zealand Dollar,1.1100 ,
US Dollar,, Australian Dollar ,1.1463 ,
Pound Sterling,, Australian Dollar ,1.8422 ,
Euro,, Australian Dollar ,1.4518 ,
New Zealand Dollar,, Australian Dollar ,0.9000 ,
[/table]
