The Pound tumbled against the Australian Dollar overnight as the South Pacific currency was supported by better-than-forecast retail sales and trade balance reports.
Given that Australian growth data surprised to the upside earlier in the week, Thursday’s encouraging result slashed the odds of the Reserve Bank of Australia introducing an additional rate cut.
The ‘Aussie’ was consequently buoyed and posted notable gains against peers like the Pound and US Dollar.
Although Sterling was able to approach a four-year high against the ‘Greenback’ during European trading, the British currency failed to recover losses against the ‘Aussie’.
After the Bank of England delivered its rate decision the GBP/AUD pairing was little changed.
As expected by the majority of economists, the BoE opted to leave interest rates unaltered and the level of asset purchases unchanged.
The decision had minimal impact on the Pound and the currency drifted lower against a boosted Euro.
In the view of currency strategist Jeremy Stretch; ‘The Pound may drift a little higher, but I wouldn’t want to be buying it. People are looking through the decision today and are considering the outlook for future policy.’
Before the weekend further GBP/AUD movement could occur as a result of Australia’s AiG performance of construction index for February.
The nation’s performance of services and manufacturing reports surprised to the upside and if the measure of construction follows suit the ‘Aussie’ could extend gains.
The index came in at 48.2 in January, below the 50 mark separating growth from contraction.
The publication of the BoE’s 12 month inflation report may also have an impact on the GBP/AUD exchange rate tomorrow.
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, 0.8962,
Australian Dollar,,Euro, 0.6539,
Australian Dollar,,Pound, 0.5360,
Australian Dollar,,New Zealand Dollar, 1.0655,
US Dollar,,Australian Dollar, 1.1157,
Euro,,Australian Dollar, 1.5294,
Pound Sterling,,Australian Dollar, 1.8673,
New Zealand Dollar,,Australian Dollar, 0.9366,
[/table]
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