Although the ‘Aussie’ declined against its currency peers following the release of less-than-impressive Chinese trade data, the South Pacific currency was able to recover some ground ahead of today’s all-important US news and tomorrow’s influential Australian employment figures.
The Australian Dollar exchange rate was trading in the region of 0.6185 against the British Pound as of 10:35 am GMT
Despite the Pound broadly softening as a result of disappointing industrial production and manufacturing data for the UK, the AUD/GBP pairing softened after data compiled by the General Administration of Customs showed that both China’s imports and exports unexpectedly slumped in June.
As China is Australia’s largest trading partner, the data was a bit of a blow to Australia’s economic outlook.
Year-on-year, exports were down by 3.1 per cent and imports fell by 0.7 per cent (economists had forecast that imports would climb by 6 per cent).
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate hit a high of 0.6220
The data prompted one Hong-Kong based economist to comment: ‘Following on the subdued activity data of recent months, the June trade data challenges the resolve of China’s policy makers to keep the macro policy stance firm.’
However, in spite of this disappointing development the ‘Aussie’ was able edge away from its recent three-year low against the US Dollar and strengthen against several of its other main currency counterparts.
The Australian Dollar was also boosted by speculation that the South Pacific’s recent decline has been excessive.
While today’s announcement by Federal Reserve Chairman Ben Bernanke is likely to be the catalyst for extensive market volatility, ‘Aussie’ movement will also be driven by domestic unemployment data, due out tomorrow at 02:30 GMT.
If Bernanke intimates that the Fed could start scaling easing back over the next couple of months, commodity-focused currencies like the Australian Dollar could be hit hard.
As industry expert Andrew Barnett states: ‘The Aussie has reacted negatively toward the China data but what the Aussie is going to really react to are the FOMC minutes and any comments that US Federal Reserve Chairman Ben Bernanke makes [...] Anything that gives the market any hint about tapering in the US is going to see strength in the US Dollar, which of course is going to be weakness in the Aussie. If the labour force figures are weak, we’re going to see further weakness in the Aussie.’
Current Exchange Australian Dollar (AUD) Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9204 >
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.7182 >
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.6185 >
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1729 >
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0851 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.3909 <
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.6169 <
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.8527 <
Correct as of 10:35 am GMT