The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate declined by around -0.3% during Thursday’s European session.
Over the course of Thursday’s Australasian session, the Australian Dollar dived versus its currency rivals. The depreciation was sparked by data which showed Australian Building Approvals for June came in at 8.6% on the year; significantly lower than the median market forecast 19.5% growth in approvals. This was a particularly worrying ecostat given that the Sydney housing bubble is pricing people out of the market. The Reserve Bank of Australia (RBA) will seriously have to consider tackling the amount of houses being built or policy easing could lead to serious issues in the housing market.
During Thursday’s European session, however, the ‘Aussie’ (AUD) recovered much of its losses. This is due to the third consecutive days rise in iron ore prices. ‘Speculation steel mills are purchasing iron ore at ports has supported futures and physical markets,’ said Huang Huiwen, a Shanghai-based analyst at Shanghai Cifco Futures Co.
However, some analysts predict that the rise in iron ore prices will be short-lived. ‘The rebound will be short-term and lower prices are expected, we still have an oversupply market,’ Kelly Teoh, an iron ore derivatives broker at Clarkson in Singapore, said on Wednesday before the price data. ‘It seemed there’s still some tightness in the physical spot cargoes.’
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trending in the region of 0.4663.
In response to a survey which showed that British personal insolvency dropped to its lowest level in nearly 10 years, the Pound strengthened versus its currency rivals during Thursday’s European session. ‘It has taken a long time, but with wages outstripping inflation again, people are finding it easier to repay their debts without resorting to insolvency procedures,’ said Phillip Sykes, president of R3, the insolvency trade body.
Additional Sterling gains can be attributed to a surprise quarterly profit posted by Royal Bank of Scotland (RBS). The British government owns RBS shares so the profit increase could see greater returns to the UK government when they come to sell their shares within the next five years.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending within the range of 0.4644 to 0.4692 during Thursday’s European session.
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