Even after China’s growth data showed moderately better-than-forecast expansion, the Australian Dollar struggled to recover earlier losses and the GBP to AUD pairing is heading for a five-day gain.
The Reserve Bank of Australia’s neutral policy meeting minutes, which reiterated the central bank’s commitment to keeping interest rates low, dragged the ‘Aussie’ lower as the week began.
Although the South Pacific asset pared declines after China’s economy was shown to have expanded by 7.4 per cent in the first quarter of 2014 (rather than the 7.3 per cent estimated) concerns regarding an economic slowdown in China remain and the ‘Aussie’ failed to rally against peers like the Pound and US Dollar.
After UK employment figures trumped expectations and triggered widespread Sterling gains, the Pound to Australian Dollar pairing prepared to post a weekly advance before the Easter break.
Overnight the ‘Aussie’ was little affected by the news that Australia’s NAB business confidence measure for the first quarter slipped from 8 to 6.
Despite the index dipping in the first three months of the year, the National Australia Bank still found confidence to be at elevated levels, with sentiment trending higher in most industries.
A lack of influential British data may restrict Pound movement today, but the currency’s bullish relationship with rivals like the Australian Dollar could continue over the weekend.
Looking ahead, FXCM analyst David de Ferranti commented; ‘Next week the local currency is likely to take cues from the first quarter CPI reading. The median estimate from economists of 3.2 per cent would put inflation above the RBA’s target range for the first time since the September quarter of 2011. A higher-than-anticipated reading would likely send the currency higher. However, the prospect of a rate raise remains some time off given that the Reserve Bank remains focused on trying to foster a rebalancing of the domestic economy.’
Other Australian data to be aware of includes the nation’s conference board leading index.
China’s manufacturing PMI could also inspire ‘Aussie’ fluctuations.
Meanwhile, minutes from the Bank of England’s latest policy meeting will be issued next week. If the minutes indicate that policy will remain on hold for the foreseeable future the Pound could shed this week’s gains.
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, 0.9356,
Australian Dollar,,Euro, 0.6768,
Australian Dollar,,Pound, 0.5562,
Australian Dollar,,New Zealand Dollar, 1.0855,
US Dollar,,Australian Dollar, 1.0686,
Euro,,Australian Dollar, 1.4797,
Pound Sterling,,Australian Dollar, 1.7978,
New Zealand Dollar,,Australian Dollar, 0.9212,
[/table]
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