The Australian Dollar (AUD) has generally been on a level pegging against its peers recently, with the recent rise seen for Australian service data potentially lifting it out of the doldrums.
The Pound (GBP) has been in a far worse situation in terms of performance, with the prolonged negative impact of PMI results continuing to mount.
The Australian Dollar (AUD) has managed to stage something of a recovery recently, especially compared to Tuesday when the ‘Aussie’ dived in the wake of the Reserve Bank of Australia (RBA) cutting the interest rate for the first time in a year.
One of the positive developments to impact the Australian currency recently has been the AiG performance of service index for April, which has risen from 49.5 to 49.7. Although positive, it is worth remembering that this remains in the sub-50 contraction range.
Elsewhere, Australian Treasurer Scott Morrison has unveiled an expansionary budget, which promises to reduce corporate taxation and increase the amount spend on vital infrastructure, at the cost of a -AU$37.1bn deficit by June 2017.
Speaking at the announcement, Morrison said:
‘The government…is making responsible choices in its national economic plan to support jobs and growth. The Australian economy is transitioning from the largest mining investment boom in its history to broader-based growth’.
The ‘Aussie’ has risen by 0.7% against the Canadian Dollar (AUD/CAD) recently, but fallen by -0.2% against the Euro (AUD/EUR).
In a dismal repeat performance, the Pound (GBP) has been softened considerably for the second day in a row by domestic data, again concerning PMI stats.
On Tuesday it was April’s manufacturing reading that fell, while yesterday brought a similar drop-off for the construction outcome for the same month.
Among the Pound’s poor exchange rate movements were losses of -0.2% against the Euro (GBP/EUR) and -0.8% against the Russian Ruble (GBP/RUB).
The next data due to have an impact on the AUD/GBP pairing will come from Australia first, in the form of the trade balance and retail sales results for March and the first quarter.
The current trade deficit is expected to contract, while retail sales are forecast to grow on the month and the quarter (excluding inflation).
The UK’s contributions to the pairing will again focus on PMIs, this time covering the composite and services fields. Declines are predicted in both cases.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.5163 and the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 1.9376 recently.
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