The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate dived by around -0.65% in the wake of Wednesday’s positive British economic data. The Australian Dollar, meanwhile, has slumped against nearly all of its major peers as a result of snail-paced economic growth.
The Australian Dollar to Pound Sterling exchange rate is currently trending in the region of 0.5371.
Australian Gross Domestic Product data printed disappointingly on Wednesday, causing the ‘Aussie’ (AUD) to soften against the majority of its currency rivals. Year-on-year Gross Domestic Product saw third-quarter growth of 2.7%, down from the 3.1% growth registered previously. On a quarterly basis, GDP improved by only 0.3%, well under the median market forecast of 0.7% and down from the previous figure of 0.5%.
‘The composition of growth was poor,’ said Tim Toohey, Goldman Sachs’s Melbourne-based head of economics and strategy for Australia. ‘With income in retreat, mining construction activity in deep decline, disappointing consumption growth, contracting housing construction, and falls in domestic demand in all mainland states outside of New South Wales.’
With commodity prices continuing to struggle, there seems to be little respite for the ‘Aussie’. ‘We have seen a dramatic fall in commodity prices, which has obviously had an impact on the Australian economy, had an impact on our nation’s income,’ Treasurer Joe Hockey told reporters in Canberra on Wednesday.
The Australian Dollar to Pound Sterling exchange rate has dropped to a low today of 0.5358.
Wednesday’s British economic data printed positively, allowing Sterling to advance against nearly all of its major peers. Official Reserves (Changes) managed to halve the deficit from -£652 million to -£321 million. The Composite PMI increased from 55.8 to 57.6, eclipsing the median market forecast of 56.2. The Services PMI came in at 58.6, advancing from the previous figure of 56.2 and beating estimates of 56.5.
The upbeat services print has caused futures traders to speculate that the Bank of England will normalise monetary policy sooner-than-anticipated, despite concerns regarding the fallout from Eurozone recession.
According to one industry expert; ‘Domestically focused services are doing OK, but it still remains to be seen whether or not that is sustainable and then you are going to eventually have spillover effects [from the Euro area.] You have to expect longer term Euro-Sterling to trade at lower levels but that’s purely a reflection of idiosyncratic Euro weakness rather than Sterling strength.’
With falling commodity prices weighing heavily on the ‘Aussie’, the Pound Sterling to Australian Dollar exchange rate is likely to continue trending higher. That being said, Australia’s retail sales and trade balance reports could have an impact on GBP/AUD trading during the Australasian session.
The Australian Dollar to Pound Sterling exchange rate has climbed to a high today of 0.5408.
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