Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate –Sterling close to five-year high on RBA comments

Pound to Australian Dollar exchange rate chart

The Australian Dollar fell close to a new five-year low against the Pound and fell below 87 cents against the US Dollar for the first time since July 2010 after another Reserve Bank of Australia policy maker talked down the currency.

The ‘Aussie’ went into decline against the majority of its peers after RBA board member Heather Ridout said; “The Dollar around US80 cents would be a fair deal for everybody. I think it hasn’t fallen far enough”.

Yesterday saw the currency decline following the release of data which hinted that Australia’s biggest trading partner, China could be seeing a slowdown in its economy. The ‘Aussie’ was also hit by the biggest decline in 12 years of the Argentinean Peso which hit demand for riskier currencies.

“You have a pretty broad range of currencies losing ground at the moment. It was after we had a poor session in Asia, and that flowed on into Europe and the US and risk appetite in general was very weak, there was a real flight to safety.

‘The Swiss franc rose 1.6 per cent over the day, which is actually more than the Turkish lira or the Chilean peso fell. There was a bigger move into the franc than there was out of the lira. The Japanese yen was also very strong,” said a senior currency strategist at Westpac.

Sterling lost some ground against a number of peers after Bank of England Governor Mark Carney vowed to not raise interest rates despite unemployment falling close to his previously stated target of 7%.

It softened further after data showed that the number of new mortgage approvals in the UK increased less than forecast in December.