Pound Sterling to Australian Dollar (GBP/AUD) exchange rate = 1.7880
• Australian Dollar Pressured, China’s PMI Declines
During the Australasian session the ‘Aussie’ softened in response to below-forecast data from China. While the nation’s HSBC Manufacturing gauge did stay in expansion territory in August, it slid from 51.7 to 50.3, a much steeper drop than the easing to 51.5 anticipated. Chinese figures have had a habit of surprising to the upside of late, so this less-than-impressive report was disappointing.
Industry expert insight…
HSBC economist Hongbin Qu issued the following statement with the report; ‘Both domestic and external new orders rose at slower rates compared to the previous month. Meanwhile, disinflationary pressure returned as input and output prices contracted over the month. Today’s data suggest that the economic recovery is still continuing but its momentum has slowed again. Therefore, industrial demand and investment activity growth will likely stay on a relatively subdued path.’
KEY MOVEMENT: The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hit a low of 1.7863
• Conference Board Leading Index Climbs
Declines in the Pound Sterling to Australian Dollar exchange rate were a little limited as Australia’s Conference Board Leading Economic Index registered an increase of 0.4%. The gain took the measure to 130.2. Of the seven components which make up the measure, six registered an increase, but according to Westpac ‘the recent behaviour of the composite indexes suggests that economic expansion is not likely to accelerate in the near term.’
The Coincident Economic Index also registered expansion, climbing by 0.2% to 125.2.
• UK Retail Sales Cause Pound Movement
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate also fluctuated during the European session after UK retail sales were shown to have increased by 0.5% on a month-on-month basis during July. A sales increase of 0.4% had been anticipated.
However, sales including autos only climbed by 0.1% in July, less than the 0.4% gain forecast, and the annual figure fell short. Sales excluding autos were up 3.4% in July, year-on-year, down from a negatively revised annual increase of 3.8% in June.
Sterling softened against peers like the Euro and US Dollar after the data was published, but held comparatively steady against the Australian Dollar.
Yesterday the Pound broadly strengthened in response to the Bank of England’s meeting minutes.
The minutes detailed a split among the nine-member Monetary Policy Committee, with two policymakers voting in favour of increasing interest rates. However, since the minutes were taken the pace of UK inflation was shown to have declined by more-than-anticipated. Unless UK fundamentals start impressing again it’s entirely likely that those officials who plumped for a rate hike in August will retract their votes in September – pushing back rate hike expectations once again.
Industry expert insight…
The minutes prompted this response from economist Chris Scicluna; ‘The views of Weale and McCafferty don’t bear a significant resemblance to those of the majority on the committee, particularly the bank staff and David Miles. They have a different reaction function. That’s probably even more so given the recent changes to staffing, and there’s probably even greater commonality of view among the international members.’
• GBP/AUD Exchange Rate Forecast
With the weekend fast approaching, additional movement in the Pound to Australian Dollar (GBP/AUD) exchange rate may be subdued due to a lack of pertinent economic data for either the UK or Australia.
KEY MOVEMENT: The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hit a high of 1.7945.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is trending in the region of 1.7875.
GBP to AUD Exchange Rate Dips due to Lack of Domestic Data
Yesterday the Pound to Australian Dollar exchange rate found relative equilibrium after both experienced negative trader reaction.
The Pound suffered losses versus most of its major peers yesterday after retail sales data produced results below expectations. The slow pace of growth saw traders pulling away from Sterling, especially in light of the increasingly bullish run of the US Dollar.
The Australian Dollar experienced similar issues when Chinese manufacturing data fell well below the forecast figure.
There are no domestic data releases today pertaining to either country. The slight softening of the Pound to Australian Dollar exchange rate could be attributed to traders seeing the negative UK results as outweighing the Chinese data. Also the ‘Aussie’ (AUD) might be maintaining some of the gains from the increasingly bearish New Zealand Dollar.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar, 0.9277,
Australian Dollar,,Euro, 0.6991,
Australian Dollar,,Pound, 0.5589,
Australian Dollar,,New Zealand Dollar,1.1067,
US Dollar,,Australian Dollar, 1.0806,
Euro,,Australian Dollar, 1.4295,
Pound Sterling,,Australian Dollar, 1.7887,
New Zealand Dollar,,Australian Dollar, 0.9026,
[/table]
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