The ‘Aussie’ was already on the back foot against a bullish Pound as Australasian trading got underway and went on to extend declines before the local session closed.
The Australian Dollar was trading in the region of 0.5548 against the British Pound as of 09:55 GMT
Although an unexpectedly positive retail sales report for Australia lent the commodity-driven currency some support, movement was limited ahead of the Reserve Bank of Australia’s rate decision.
The retail sales report showed that sales increased by 0.5 per cent in October rather than the 0.4 per cent forecast, after gaining by a positively revised 0.9 per cent in September.
However, the figures did reveal a slowing in online retail sales.
Senior economist Gerard Burke said of the result; ‘When we look a little bit deeper we can see that growth has continued quite strongly in areas like media, groceries and liquor, home wares and appliances. But a number of other sectors have really slowed down quite significantly. Areas like daily deals, recreational and personal goods, toys and electronic games.’
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate hit a low of 0.5523
Any ‘Aussie’ gains inspired by the retail sales report proved short lived as the currency broadly declined in response to comments issued by the Australian central bank.
While the RBA opted to hold the benchmark interest rate at a record low of 2.5 per cent, it once again stressed the necessity of a lower Australian Dollar exchange rate.
The ‘Aussie’ may have softened by over 4 per cent since the RBA met last month, but Governor Glenn Stevens still stated that the currency is ‘uncomfortably high’ and that a lower exchange rate is ‘likely to be needed to achieve balanced growth in the economy’.
As well as falling against the Pound in the aftermath of the rate decision the ‘Aussie’ hit a five-year low against the New Zealand Dollar and weakened against its US counterpart.
According to Sydney-based industry expert Su-Lin Ong; ‘The hurdle to cut further is high with the RBA clearly reluctant to take the cash rate lower and hoping for further currency weakness to help in the rebalancing challenge. The RBA appears happy to sit on the sidelines and monitor data and developments with the next board meeting not until February.’
During the European session the AUD/GBP pairing tumbled further still as the Pound was lifted by a surprisingly strong UK construction report.
Later today further ‘Aussie’ fluctuations could be triggered by a domestic AiG performance of service index for November.
The services gauge came in at 47.9 in October.
Of course, Australian GDP figures (due for release at 00:30 GMT) may also have a considerable impact.
Current Australian Dollar Exchange (AUD) Rates
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The Australian Dollar/US Dollar Exchange Rate is currently in the region of: 0.9103 <
The Australian Dollar/Euro Exchange Rate is currently in the region of: 0.6713 <
The Australian Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5548 <
The Australian Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1103 <
The US Dollar/Australian Dollar Exchange Rate is currently in the region of: 1.0982 <
The Euro/Australian Dollar Exchange Rate is currently in the region of: 1.4904 >
The Pound Sterling /Australian Dollar Exchange Rate is currently in the region of: 1.8005 >
The New Zealand Dollar/Australian Dollar Exchange Rate is currently in the region of: 0.9004 >
Correct as of 09:55 GMT
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