The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate plummeted by around -1.93% on Tuesday afternoon.
In the aftermath of the decision by the Reserve Bank of Australia (RBA) to cut its benchmark interest rate amid tanking oil prices, the Australian Dollar softened across the board. With speculation rife that the RBA have only begun an easing process, the ‘Aussie’ (AUD) continues to trend lower versus the majority of its most traded currency counterparts.
The Pound Sterling, meanwhile, is generally trending higher versus most of its major peers. This is as a result of construction data eclipsing the median market forecast figure. The gains have been somewhat laboured, however, with the forthcoming general election causing mounting political uncertainties.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trending in the region of 0.5092.
The RBA cut its cash rate from 2.50% to 2.25% on Tuesday, causing the ‘Aussie’ to decline versus all of its most traded currency competitors. ‘Overall, the Bank’s assessment is that output growth will probably remain a little below trend for somewhat longer, and the rate of unemployment peak a little higher, than earlier expected,’ said RBA Governor Glenn Stevens in a brief statement.
‘The global monetary policy changes over the past month have raised the degree of difficulty in getting the Aussie dollar down,’ said James McIntyre, head of economic research in Sydney at Macquarie Bank Ltd., who picked today’s move. ‘The RBA has reached the conclusion that it’s going to have to step up and give the currency a push to get the weakness desired. We think there’s at least one more cut to come.’
Federal Treasurer Joe Hockey welcomed the decision, stating; ‘This is good news for Australian families and it’s good news for Australian business. It’s good news for jobs and it’s good news for households. This will put an extra $750 a year into the pockets of a typical Australian family with a mortgage of $300,000.’
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate has dropped to a low today of 0.5077.
The UK Construction PMI eclipsed the median market forecast of a drop from 57.6 to 57.0, with the actual result advancing to 59.1. This caused the Pound to strengthen versus the majority of its most traded currency rivals.
The gains have been somewhat sluggish, however, with the forthcoming general election looming overhead. With political uncertainties regarding Britain’s future in the EU, traders are reluctant to invest heavily in the British asset.
Given the extent of the ‘Aussie’ declination following the RBA rate cut, the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is likely to hold losses for the remainder of Tuesday. There is the potential for the Pound to extend gains versus the Australian Dollar on Wednesday thanks to a complete absence of Australian data. For those invested in the Pound, the Markit Composite and Services PMis will be of interest.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate advanced to a high today of 0.5206.
Disclaimer: Currency-Converter.com.au and its data provider, TorFX, make no claims regarding the validity or exactness of the information provided in on this site and will not be held liable for any use, interpretation, or other implementation of the information provided. Currency-converter.com.au make no warranties, express or implied, as to results to be obtained from use of such information, and make no express or implied warranties of condition, quality, performance, merchantability or fitness for a particular purpose or use. Currency-converter.com.au shall not have any liability for the accuracy of the information contained in the services provided or ommissions there in which are made available on a free, as-is basis. None of the aforementioned parties shall be liable for any third party claims or losses of any nature, including, but not limited to, lost profits, punitive, consequential, special, incidental, indirect or similar damages even if advised of the possibility of such damages. Rates offered are interbank rates and may not be the same as offered by your financial institution, and do not include commissions. Rates shown on this site will vary from those provided by TorFX or other providers linked to from this site.