The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate has dropped by -0.4% today, just one of many losses for the ‘Aussie’ (AUD).
In addition to falling against the Pound Sterling (AUD/GBP), the Australian Dollar has dropped by over -0.3% against the Canadian Dollar (AUD/CAD), the US Dollar (AUD/USD) and the New Zealand Dollar (AUD/NZD). Worse results of over -0.7% have been seen against the Euro (AUD/EUR) and the Chinese Yuan (AUD/CNY).
This overall decline comes with the news that the Reserve Bank of Australia (RBA) has chosen to freeze the Australian interest rate at 2%. The lack of a cut is attributed to the Australian economy growing steadily, but no rise has been introduced on account of other economic conditions, such as the tumbling price of iron ore and the recent upheaval in the Chinese stock markets. RBA Governor Glenn Stevens offered mixed hopes for the Australian economy, stating that ‘Australia’s terms of trade are falling’ but also adding that ‘Overall, global financial conditions remain very accommodative’.
The Pound Sterling (GBP) has risen by 0.4% against the Australian Dollar (GBP/AUD) today, although on the whole Sterling’s performance has been negative. Losses include falls of -0.4% against the Chinese Yuan (GBP/CNY), -0.7% against the Japanese Yen (GBP/JPY) and -1.4% against the Russian Ruble (GBP/RUB). These were offset slightly by a rise of over 0.5% against the Mexican Peso (GBP/MXN), the South African Rand (GBP/ZAR) and the Norwegian Krone (GBP/NOK).
The Pound’s dismal turnout today has been caused by an overall lack of confidence in the UK economy; while the UK Mortgage Approvals figure for July showed an increase, the Net Consumer Credit for July and Manufacturing PMI for August both declined compared to previous results. Bank of England Governor (BoE) Mark Carney didn’t add to the overall despondency surrounding Sterling over the weekend by having little concrete to say about when and by how much a UK interest rate rise would be.
The UK and Australia have no further data releases today, so the next biggest impactor on the AUD/GBP pairing will be the US ISM for Manufacturing in August. Forecasts have been for a fractional decline and anything greater than this will further damage confidence in the ‘Buck’ (USD). Tomorrow, the Australian GDP results for August are due in and if these figures conversely rises against the predicted drop, the ‘Aussie’ (AUD) may yet rise against the Pound Sterling (AUD/GBP).
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.4617 and the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.1673 today.
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