The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate has recorded minimal gains today, but this comes at a time when the ‘Aussie’ has shown record lows in other pairings.
In the midst of the commodity crash that has sent the ‘Aussie’ into turmoil, the Australian Dollar (AUD) has shown only minor gains against its rivals today. The AUD gained over the Canadian Dollar (AUD/CAD) and the Chinese Yuan (AUD/CNY) by 0.1%, and rose slightly by 0.3% against the Pound Sterling (AUD/GBP) and the US Dollar (AUD/USD).
However, the AUD saw a significant loss against the Euro (EUR) today, with a -0.7% drop in the AUD/EUR exchange rate. An even worse decline was against the Singaporean Dollar (AUD/SGD), where the Australian Dollar fell to 0.9967, its lowest value since 2009.
While the Australian Dollar’s loss against the Euro (AUD/EUR) is due to optimistic moves being made by the European ‘Troika’ concerning Greece, the rest of the AUD’s lacklustre performance can be attributed to the continuing troubles that the Australian economy faces. Primarily, these are due to a decline in the value of its commodity exports, which are mainly made up of ores and minerals extracted by mining.
China and India were previously the biggest importers of Australia’s exports, but an industrial and economic ‘slowdown’ in those countries has seen the demand for Australian iron ore and coal reduce significantly. Mark Lennox, Senior Private Advisor at HC Securities, said that he ‘wouldn’t be surprised to see the Australian market take its own direction over the coming weeks.’
Although the Australian Dollar is gaining slightly against the Pound Sterling (AUD/GBP), this doesn’t seem set to last. The UK’s Q2 GDP data is due for release tomorrow, and although the yearly prediction is for a -0.3% drop, the quarterly estimate is for growth of 0.3%. If the forecasts are correct, and the quarterly data is met optimistically, the Pound Sterling may become bullish against the ‘Aussie’, reversing the current slight AUD gains.
Regardless of the results of tomorrow, the Australian Dollar seems set for more trouble in the rest of the year; the latest Commodities Outlook Report by the World Bank has bleakly stated that ‘All main commodity price indices are expected to [continue to] decline in 2015’.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.4705 and the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.1269 today.
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