Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate drops 0.25%, AUD/USD Dips
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate declined by 0.25% during Thursday’s European session, reversing gains recorded earlier in the week.
The ‘Aussie’ has shown remarkable resilience over the last few days, putting on an impressive front in spite of fluctuating commodity prices, Iraqi tensions and a lack of domestic news.
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Over the course of the week the Australian Dollar to Pound (AUD/GBP) and AUD/USD exchange rates have been trending higher thanks to lacklustre economic reports for the US and a surprising turnaround on interest rates in the UK.
Earlier this week Bank of England Governor Mark Carney appeared to retract previous statements regarding increasing interest rates earlier than markets currently expect. His dovish comments pushed the Pound lower against its peers, but Sterling recovered ground today after the BoE’s Financial Stability report was published.
The report outlined measures for dealing with the UK’s housing market, perceived to be the biggest threat to domestic growth.
After the report was published the Australian Dollar to Pound (AUD/GBP) exchange rate fell to a low of 0.5521.
The ‘Aussie’ was able to hold above 94 US cents after the US first quarter GDP figure was negatively revised to contraction of 2.9% from an initial estimate of contraction of 1.0% on Wednesday.
The Australian Dollar appears to have a knack of bouncing back from knocks, and this has proved to be the case once more. The Reserve Bank of Australia’s recent dovish policy minutes might have caused a blip in the currency last week, but it is certainly fighting back now.
As stated by one locally-based currency expert, the strength of the AUD/USD exchange rate is largely determined by ‘how strong the US Dollar is, and at the moment it is looking relatively weak.
If we can close above 94 US cents this week, it’s more likely that we’ll get a retest of 94.60 US cents ot 94.40 US cents.
Today’s US reports revealed that personal spending in the US increased by half the amount expected in May, rising by 0.2% on the month rather than the 0.4% forecast.
Separate figures showed that US initial jobless claims fell from a negatively revised 314K to 312K in the week ending June 21. Economists had predicted a reading of 311K.
The AUD/USD pairing was trading in the region of 0.9404 after the reports were released.
Although there is no notable economic news for Australia scheduled for publication overnight, China’s Industrial Profits report will be of interest to investors.
The Australian Dollar to Pound (AUD/GBP) exchange rate is currently trading in the region of 0.5532 and the Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trading in the region of 0.9409.