Turbulence Resumes on Global Stock Markets, ‘Aussie’ (AUD) Softened this Morning
In spite of generally hawkish comments from Australian Treasurer Joe Hockey and Prime Minister Tony Abbott over the last day the ‘Aussie’ has been struggling to claw back its losses and pull down the GBP/AUD pairing. With the initial optimism of the People’s Bank of China (PBoC) loosening interest rates over, however, the commodity currency remains buffeted by unfavourable global headwinds and low export values. While the GBP/AUD exchange rate is up this morning at 2.2053 though it has entered something of a downtrend to cede back some of the night’s gains.
Earlier…
Global stock rebounds have lifted the Australian Dollar (AUD) today as risk aversion and trader panic have begun to abate, pushing the GBP/AUD pairing down from a six-year best.
Rout of Global Stock Markets Decimated Outlook for Australian Dollar, GBP/AUD Capitalised to Post Six-Year Best Rate
Black Monday weighed heavily on the ‘Aussie’ (AUD) as global stocks plunged dramatically, taking commodity values with them and creating an atmosphere of strong risk aversion. With the Australian ASX 200 following the lead of Beijing an almost universal downtrend was recorded, resulting in $60 billion being wiped out by the end of the day. As the prices of key domestic exports such as copper dipped still further amidst the panic sell-off, the antipodean currency shed value across the board. The GBP/AUD was among those boosted, striking a six-year high of 2.2089 at the height of the trading panic.
Although the FTSE 100 was ultimately subject to similar losses, down 4.67% at close, the Pound (GBP) remained one of the stronger majors yesterday. With the stock commotion effectively eliminating the possibility of a Bank of England (BoE) interest rate increase occurring any earlier than the first quarter of next year, however, that strength was very much driven by the softening of rivals.
Stock Recovery Rescues ‘Aussie’ (AUD) from Slump as Commodities and Markets Pick up Today
This morning’s Australian Conference Board Leading Index for June proved to be disappointing, clocking in at -0.2% to fall on the previous month’s figure of 0.2%. However, this was easily overshadowed by the impressive turnaround in the majority of the world’s stock markets as pundit fear gave way to more a rationalised round of trading. With commodities beginning to regain some lost ground and speculation suggesting that the Fed may soon be making a move to loosen interest rates rather than going through with the long-anticipated tightening, the ‘Aussie’ has naturally bounced back to pull the GBP/AUD pairing down to a daily low of 2.1767.
GBP/AUD Exchange Rate Forecast: UK House Loans May Prompt Pound Rally Tomorrow
With no further economic data due from Australia for the remainder of the week there will be little to distract from the action on the stock markets. Further volatility is unlikely to be kind to the ‘Aussie’, particularly if the recent People’s Bank of China (PBoC) interest rate cut of 0.25% fails to adequately stimulate the Chinese market.
Tomorrow’s UK BBA Loans for House Purchase figure could push the GBP/AUD exchange back towards gains if it reflects optimistically on the domestic housing market. Consumer Confidence Survey and GDP results may also provide good rallying points for the Pound on Friday, although developments in the global economy are still likely to be the primary driving force for the pairing for some days to come.
Current GBP, AUD Exchange Rates
At time of writing the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate remains in a relative slump in the range of 2.1909, while the Australian Dollar to Euro (AUD/GBP) pairing is climbing at 0.4559.
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