Today’s Australian Dollar to Pound Sterling (AUD/GBP) exchange rate seems like a race to the bottom for the two weakened currencies. The Australian Dollar (AUD) is currently wallowing deep in negative territory following a fresh round of stock sell-offs, while Pound Sterling (GBP) has tumbled on a widening trade deficit in 2015.
News that China spent $99.5 billion of its foreign reserves on strengthening the Yuan (CNY) last month has caused another rout in the global stock markets, leaving the Australian Dollar floundering amid cold risk-appetite. The ‘Aussie’ is currently down -0.1% against the US Dollar (USD), -0.8% against the Euro (EUR) and -1% against the Canadian Dollar (CAD) as traders turn to safer assets.
The ASX All Ordinaries Index closed down -2.6%, with banks in particular feeling the brunt of the latest sell off. The Bank of Queensland performed worst of all, with shares dropping -8.1% after it announced a AUD$15 million review of its operations model, which was likely to result in some job cuts. Westpac shares dropped -5.1%, National Australia Bank (NAB) fell -4.8% and Commonwealth Bank shares declined -4.6%. The new decline means that the total struck from Australian equities during the start of 2016 is now more than -$42 billion.
This has eclipsed today’s Australian data, which shows that assessment of current business conditions slipped slightly, with the NAB index sliding from 6 points to 5, while the Business Confidence index held steady at 2 points.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trading in the region of 0.4889.
The Pound’s performance against the Australian Dollar is the one of the few anomalies on a board of losses today thanks to the trade balance figures released earlier during the London session. Pound Sterling initially rose after the numbers for December showed a shrinking trade deficit, with the total trade balance narrowing by -£1.3 billion and an upwards revision to the previous Non-EU trade balance meaning that the current reading of -£2.4 billion is an improvement of over -£1 billion.
However, as the final piece in the overall picture for 2015, the data has disappointed. A lack of a bigger contraction in the deficit means that the total trade balance for the UK in 2015 was a record -£125 billion, nearly -£2 billion higher than in 2014. December’s figures also mean that the final quarter of 2015 saw a widening of the trade deficit from -£8.5 billion to £10.3 billion.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trading between 2.0378 and 2.0664.
The Westpac Consumer Confidence index for Australia is due out during the upcoming Australasian session, with the index currently languishing in negative territory. There is no UK data due out until tomorrow’s London session, when industrial and manufacturing production statistics will be released.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trading between 0.4838 and 0.4905.
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