Currency exchange investors saw the Australian dollar to pound rate (GBP/AUD) surpass the best conversion level buyers have seen in six months yesterday.
Where does the Australian dollar stand against the major currency peers, including the British pound, euro and NZ dollar today?
- The pound to Australian dollar exchange rate continues to slide, 0.71pct lower today.
- The AUD/EUR holds relatively firm just 0.07 pct down.
- The Aussie to NZ dollar cross is managing a 0.38 per cent gain compared to yesterday's close.
- Finally, the AUD/USD exchange rate trends -0.29 per cent lower than Friday's open.
An overwhelming lack of risk-appetite towards the end of this week has kept the Australian Dollar weak, even against the British pound which was suffering after dovish GDP predictions.
Fluctuating demand however has finally seen the AUD/GBP exchange rate break out of negative territory.
The Pound Sterling has been able to trend positively against the Australian Dollar thanks to another round of investor cautiousness, which has seen risk-appetite hit rock bottom.
GBP should be weak due to the -0.3% cut the Confederation of British Industry (CBI) delivered to its UK GDP forecasts for the next two years, but AUD is proving the softer asset.
Before we continue with the currency news, here are today's fx rates for your reference;
On Friday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The pound conversion rate (against pound) is quoted at 1 GBP/GBP.
The GBP to EUR exchange rate converts at 1.161 today.
The pound conversion rate (against us dollar) is quoted at 1.237 USD/GBP.
At time of writing the pound to new zealand dollar exchange rate is quoted at 2.102.
NB: the forex rates mentioned above, revised as of 19th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
Earlier: Although it remains strong against most currencies, Pound Sterling is sliding against the Australian Dollar following disappointing production stats which show that the industrial and manufacturing sector recovery has stalled in 2015.
The AUD is strong thanks to USD weakness, with low US Dollar appetite ahead of the speech by Janet Yellen today.
With Bank of England (BoE) dovishness weighing heavily on 2016 rate hike bets, the British pound sterling (GBP) has been outperformed by most currency peers since the turn of 2016.
Additional pound vs Australian dollar exchange rate losses can be attributed to uncertainty regarding the forthcoming EU referendum.
The widening trade gap between the UK and the rest of the world is also having a detrimental impact on Sterling demand.
GBP/AUD Exchange Rate News and Outlook
The Pound endured a highly volatile trading session yesterday against all sixteen of the most actively traded currencies in the foreign exchange market.
Against the Australian Dollar, the British Pound continues to trade at the bottom of the trading range of the last six months.
In UK news, the Office for National Statistics (ONS) reported that the UK's trade gap with the rest of the world widened in the fourth quarter by £300 million to £34.7 billion with the most likely culprit the slight drop in exports, down 0.2% between December 2015 and December 2016.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics said "December's trade figures indicate that the economic recovery remains unbalanced and imply that net trade has continued to drag on GDP growth."
In contrast, the latest BRC-KPMG Retail Sales Monitor showed that UK retail sales in January were much stronger than expected, rising by 2.6% on a like-for-like basis compared to the same month of 2015. The data showed total retail sales were up 3.3%, the best monthly growth since September.
Helen Dickinson, BRC's chief executive said "This was the best performance for retailers since September and ahead of the three and twelve month averages. Retailers will welcome the positive start to what will be a momentous year for the industry. Next month the Treasury will report back on its long awaited review of the business rates system. This is the moment for the government to rebalance this tax away from property intensive industries in order to ensure that the introduction of the living wage does not have unintended consequences on our local communities and jobs."
Goldman Sachs Reported 20% Decline in Sterling Value thanks to Political Uncertainty
The continuing mixed picture being painted by the UK economy allied to the dovish policy statements from the Bank of England and the sharp rise in political risk associated with the proposed ‘in / out’ referendum of the UK’s membership of the EU (European Union) is undermining the value of the Pound in the foreign exchange market and 2016 has to date been a difficult year to date.
On Friday of last week, giant investment bank Goldman Sachs (GS) reported a possible 20% drop in the value of the Pound from the sharp rise in political uncertainty in the UK which would take the Pound to Aussie Dollar interbank rate down to around 1.63.
Yesterday it was the turn of Svenska, ABN-Amro, Bank of America and Saxo who all go further suggesting yesterday that the Pound will lose up to 17% of its value in 2016 regardless of the referendum result due to the political uncertainty.
Yesterday, the IMF (International Monetary Fund) reported that India’s economy grew at a faster pace than the Chinese economy in 2015 with a growth rate of 7.5% in 2015 compared to china’s 6.9% rate.
Even the continuing slowdown in the Chinese economy, by far and away the most important trading partner for the Aussie economy together with the sharp sell-off in the commodities markets have not been enough to reverse the selling pressure on the Pound to Aussie Dollar exchange rate.
The Pound to Aussie Dollar exchange rate currently has support levels at 2.0415 and 2.0358 interbank with a resistance level of 2.0644.