- UK currency dives as construction PMI drops
- Worst outcome for UK industry in around three years
- Australian Dollar mixed in appeal after latest services result and Fed speech
- Australian trade balance and retail stats due early tomorrow
The Pound (GBP) has been an extremely unstable option for investors recently, having been successively devalued by the outcome of UK PMIs.
The Australian Dollar (AUD) tanked yesterday, but has managed to stage something of a recovery today on positive services stats.
UK Economic News: Pound Weakens as Historic Low for Construction PMI Result puts UK Economy on the Back Foot
The Pound has slipped up against a majority of its rivals today, with losses including -0.3% against the Euro (GBP/EUR), -0.4% against the US Dollar (GBP/USD) and a lesser but still noticeable decline against the Australian Dollar (GBP/AUD). Gains have consisted of 0.2% against the New Zealand Dollar (GBP/NZD) and 0.8% against the South African Rand (GBP/ZAR).
The latest damage to be dealt to the value of the Pound has come from the UK economy, in the form of the construction PMI outcome for April. In the vein of yesterday’s disappointing manufacturing PMI outcome for the same period, the construction figure declined from 54.2 to 52 points; the first sector slowdown seen since March 2013.
Commenting on the result, Markit Senior Economist Tim Moore said:
‘Softer growth forecasts for the UK economy alongside uncertainty ahead of the EU referendum appear to have provided reasons for clients to delay major spending decisions until the fog has lifted.’
This assertion has likely only lowered investor sentiment further, given that the UK Referendum vote is still over seven weeks away.
Australian Dollar (AUD) Balanced by Latest Services Outcome
In a more positive industry output story, the Australian Dollar (AUD) has recovered slightly from the week’s earlier Reserve Bank of Australia (RBA) interest rate cut due to its performance of service index for April.
While no forecasts had been made for the outcome, the AiG index nonetheless showed a rise from 49.5 to 49.7, which was a positive result, even if it remained in the contraction zone.
Notable Australian Dollar movements in the wake of the service news have included losses of -0.2% against the Euro (AUD/EUR) and -0.4% against the US Dollar (AUD/USD) and gains of 0.2% against the New Zealand Dollar (AUD/NZD) and a tight trending against the Pound Sterling (AUD/GBP).
Future GBP, AUD Forecast: Australian Trade Balance and Retail Sales could Provoke Volatility
The next announcements likely to have an impact on the GBP/AUD pairing will come from the latter half, with Australia’s positively-predicted trade balance and retail sales results for March coming out early tomorrow.
Following on from this in the UK will be the announcement of the composite and services PMIs for April, which are unfortunately expected to decline in both fields.
Current GBP, AUD Exchange Rates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 1.9382 and the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.5164 today.
Comments are closed.