The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate has declined considerably today after the People’s Bank of China (PBoC) dropped the Chinese Yuan’s (CNY) value by -1.9%.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate has dived by -1.6% today, after the PBoC decision sent the ‘Aussie’ (AUD) (and other commodity currencies) into a highly bearish decline. The Australian economy wasn’t helped by the NAB Business Confidence figure for July, which showed a -6 point fall from the previous total of 10 points. Weakness in the Chinese economy spells bad news for the ‘Aussie’, as China will be taking in even less of Australia’s mining exports; iron ore and gold are already struggling with their lowest prices in 5 years.
The Australian Dollar fell by -0.8% against the Canadian Dollar (AUD/CAD) today; this was followed by worse losses of over -1.6% against the Euro (AUD/EUR) and the US Dollar (AUD/USD). The only real gains of the ‘Aussie’ today have been against the Chinese Yuan (AUD/CNY), against which it has trended narrowly.
The Pound Sterling (GBP) has made significant gains against many of the commodity currencies affected by the Yuan’s (CNY) devaluation today, including a 1.6% gain against the Australian Dollar (GBP/AUD). The Pound has also gained by more than 1% against the South African Rand (GBP/ZAR), the Mexican Peso (GBP/MXN) and the New Zealand Dollar (GBP/NZD). Among the Pound’s other gains were a rise of 1.4% against the Singapore Dollar (GBP/SGD) and an advance of over 1.8% against the Chinese Yuan (GBP/CNY) and the Russian Ruble (GBP/RUB). Losses for the Pound included a -0.4% drop against the Czech Republic Koruna (CZK) and a -0.6% fall against the Polish Zloty (GBP/PLN).
The only data release for the UK today was the yearly BRC Like-For-Like Sales figure for July, which rose by 1.2% over the forecast 1% increase.
The ‘Aussie’ is likely to be affected tomorrow by the Westpac Consumer Confidence report for August and the Q2 quarterly and yearly Wage Cost Index. Forecasts for the quarterly figure are mildly optimistic, although a few hours later, the next batch of Chinese data (which includes Industrial Production and Retail Sales figures for July), may cancel out any gains made by the Australian Dollar if they fall short of expectations.
The Pound Sterling will be most immediately affected by the UK Job Claims, Employment and Earnings figures, also due out tomorrow. Forecasts are mixed across the board, so any major deviations may trigger a strengthening or softening of the GBP/AUD exchange rate depending on which of the figures fall. However, this disappointment may be overridden by the US Monthly Budget Statement for July that follows; any unexpected positives will drive the US Dollar (USD) up and the Australian Dollar down.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.4683 and the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.1362 today.
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