The Australian Dollar has been an unstable option of late on mixed domestic data, while the Pound has been similarly unsettled by widespread concerns about business confidence and future sources of energy for the UK.
The value of the ‘Aussie’ has taken a hit recently, with an unexpected drop in national credit stats serving to lower the overall appeal of the Australian currency. This comes in contrast to earlier gains recorded for the Australian currency.
Though the export and import prices from the second quarter respectively rose and fell in supportive movements on Thursday, Friday’s private sector credit stats for June fell from 0.4% to 0.2% on the month and dipped from 6.5% to 6.2% on the year.
In addition, annual PPI for Q2 fell from 1.2% to 1%, though the quarterly printing actually saw a rise from -0.2% to 0.1%.
The Pound has had an unenviable end to the previous week, having been knocked once again by falling confidence and concerning pre-’Brexit’ figures.
In the first instance, Friday morning’s GfK consumer confidence result for July fell from -1 to -12, which was the sharpest drop in around 26 years of recording.
In addition to this, the evening’s mortgage approvals stats for June also fell from a prior 66.72k to 64.77k, which heightened anxieties about how the figures for July onwards would turn out.
Compounding the uncertainty that is rife in the UK economy at present, Thursday night’s decision to go ahead with building the billion-Pound Hinkley Point C Power Station by EDF was brought to an abrupt halt by unexpected hesitancy from the UK government.
This last-minute reluctance has sparked a number of theories over why the stall was put in place; having examined the evidence, BBC Economics Editor Kamal Ahmed has said;
‘Under the present agreement, China would be in charge of the Bradwell project (another proposed power plant), and Theresa May’s adviser Nick Timothy has previously raised concerns about security and Chinese investment’.
The week to come is set to bring mirrored economic announcements from Australia and the UK, starting off on Monday with Australia’s AiG manufacturing index for July. This has a rise from 51.8 to 52.6 forecast, while for the UK the finalised manufacturing PMI for the same month is expected to fall from 52.1 to 49.1.
A pair of interest rate decisions by central banks will also be major events to watch out for, with the Reserve Bank of Australia (RBA) decision coming on Tuesday afternoon. In this instance, forecasts have been mixed, with some seeing another rate freeze taking place and others predicting a cut from 1.75% to 1.50%.
The Bank of England (BoE) rate decision, due on Thursday night, is also forecast to have a potential cut in store, with economists putting around a 50/50 chance of the UK’s current interest rate of 0.50% being reduced to 0.25%.
The Australian Dollar Pound (AUD GBP) exchange rate has been trending in the region of 0.5702 and the Pound Australian Dollar (GBP AUD) exchange rate has been trending in the region of 1.7544 recently.
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