The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has been trending narrowly today as the ‘Aussie’ (AUD) prepares for a possible crash in the price of iron ore.
Flat Performance for GBP/AUD Exchange Rate follows Mixed UK Debt Results
The Pound Sterling (GBP) has trended in a narrow range against the Australian Dollar (GBP/AUD) today and elsewhere the Pound has failed to take advantage of the positive results shown for UK borrowing figures. Asides from trending narrowly against most other currencies, the Pound has risen by 0.6% against the Indian Rupee (GBP/INR) but fallen by -0.6% against the Swedish Krona (GBP/SEK).
This uninspiring show overall has been partially caused by a mixed bag in terms of UK debt figures. The UK Public Finances results for July showed a beneficial -£3.029bn drop, but while the Public Sector Net Borrowing result also saw a fall of -£2.07bn, this figure fell short of the -£2.8bn reduction that had been expected.
Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Slumps as Iron Ore Price Drop is Predicted
The Australian Dollar (AUD) has declined overall today, with a stalemate against the Pound Sterling (AUD/GBP) being the least of the damage. The ‘Aussie’ has also fallen by -0.4% against the New Zealand Dollar (AUD/NZD) and by -0.6% against the Euro (AUD/EUR).
These lows are expected to just be the tip of the downtrend iceberg for the Australian Dollar, however, as the price of iron ore has been forecast to drop for the first time in over a month. The price of iron ore hit its lowest point in 6 years during April this year, but since then the cost per metric ton had been steadily rising. During July, however, the price dropped by over -17% from over $61 to around $51 at the end of the month.
Predictions are for a further drop in the price of iron ore in the coming days as the Chinese Caixin PMI for Manufacturing in August fell further below the growth figure of 50.0 this morning. This wasn’t helped by the news that steel mills in and around Beijing (which use iron ore in the production process) have been ordered to reduce production in a bid to clean up the capital’s air quality for a 70th anniversary parade marking the surrender of Japan in World War II.
GBP/AUD Conversion Rate likely to Rise Today if US PMI Exceeds Forecasts
Although the Pound (GBP) has performed poorly today, it stands to reverse its lack of progress against the ‘Aussie’ (AUD) if the US Manufacturing PMI for August comes in above the 53.8 prediction.
Current GBP, AUD Exchange Rates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.1368 and the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.4682 today.