The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate advanced by around 0.81% on Tuesday afternoon.
Although the Australian Dollar would ordinarily soften amid dampened market sentiment, increased demand for gold caused the ‘Aussie’ Dollar to strengthen against most of its major peers. To add to the Australian Dollar uptrend was better-than-anticipated data out of China.
The Pound Sterling, meanwhile, is trending lower versus many of its most traded rivals as a result of disappointing domestic data.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trending in the region of 0.5343.
As explained above, the advance in gold prices for the third-consecutive day has caused the Australian Dollar to strengthen. ‘After more than two months of testing the $1200 an ounce level, it looks as if the catalyst the metal was waiting for has arrived,’ said Gnanasekar Thiagarajan, director of research firm Commtrendz. ‘The fall in oil prices and problems with Greece have spooked asset classes across the world and this has resulted in safe haven buying for gold.’
Data out of China printed positively, aiding the ‘Aussie’ advance. China’s Services PMI ticked higher from 53 to 53.4, and the Composite PMI strengthened from 51.1 to 51.4.
Commenting on the China Services and Composite PMI data, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said; ‘The solid performance was supported by another strong expansion in new business. The employment index improved modestly and price pressures remain muted. The services sector continued to hold up well amidst the manufacturing downturn, providing some counter-weight to the downward pressures on the economy.’
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate dropped to a low today of 0.5295.
After domestic data failed to meet with forecast figures, the Pound slumped versus many of its most traded currency competitors. Of particular detriment was the Services PMI which dropped beyond the median market forecast of a dip from 58.6 to 58.5, with the actual data falling to 55.8.
David Noble, Group Chief Executive Officer at the Chartered Institute of Purchasing & Supply, stated; ‘Though the index reports a slowdown this month, the recent wave of optimism has not abated amongst the panel’s respondents, half of whom believe 2015 will still be a good year.’
Although the Australian Performance of Service Index, due for publication late on Tuesday evening, has the potential to spark volatility, the Australian Dollar to Pound Sterling exchange rate is likely to continue trending higher. This is because market sentiment towards the Pound dampened considerably and gold prices look to continue appreciation.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate advanced to a high today of 0.5360.
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