The GBP to AUD pairing began the local session in a stronger position as investors digested Australasian news and waited for the release of UK employment figures.
Neutral Reserve Bank of Australia policy meeting minutes left the ‘Aussie’ struggling against its major rivals yesterday and the South Pacific currency largely held these declines overnight.
The appeal of the Australian Dollar wasn’t enhanced by the news that Australia’s leading index was flat in March.
The Westpac measure of Australia’s economy flat-lined in March after declining by 0.1 per cent the previous month.
The March reading of 98.38 was little-changed from February’s 98.41 and remains below the 100 score dividing growth from stagnation.
According to RTT News; ‘Among the individual components of the survey, slower growth was seen in consumer sentiment expectations, dwelling approvals, unemployment expectations and commodity prices’.
However, ‘Aussie’ losses were trimmed as a report revealed that China’s economic growth slowed by less-than-feared in the first quarter of the year.
Although the pace of growth was the weakest for six quarters it came in at 7.4 per cent in the first three months of 2014 rather than the 7.3 per cent expected.
Growth of 7.7 per cent had been recorded in the fourth quarter of 2013.
The moderately better than expected result helped boost risk appetite and support currencies like the Australian Dollar.
Separate Chinese data showed that retail sales increased by 12.2 per cent in March year on year (higher than the 12.1 per cent estimate).
China’s industrial production increased by an annual 8.8 per cent last month, less than the 9 per cent gain forecast.
While the ‘Aussie’ was able to pare some of its previous losses following the release of the Chinese reports, in the view of FXCM analyst David de Franti; ‘The Aussie continues to struggle below a key technical level at 0.9440. Traders are likely weighing the prospect for renewed strength in the absence of major domestic economic data as we go into the end of the week.’
Over the last few days the AUD/USD exchange rate has moved away from last week’s five-month high and the AUD/GBP pairing has also struggled.
In the hours ahead the Australian Dollar will probably post additional declines against the Pound.
UK employment figures showed that the nation added significantly more positions than expected in March, with the unemployment rate plunging to a five-year low.
As the result may push the Bank of England into adapting stimulus the Pound could post significant gains against its major rivals in the hours ahead.
Before the weekend further AUD to GBP fluctuations could occur in response to Australia’s business confidence report.
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, 0.9355,
Australian Dollar,,Euro, 0.6760,
Australian Dollar,,Pound, 0.5581,
Australian Dollar,,New Zealand Dollar, 1.0901,
US Dollar,,Australian Dollar, 1.0694,
Euro,,Australian Dollar, 1.4767,
Pound Sterling,,Australian Dollar, 1.7921,
New Zealand Dollar,,Australian Dollar, 0.9163,
[/table]
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