The GBP to AUD exchange rate started the new trading month by gaining over 1.5% in value at one point yesterday to reach a two month best conversion level despite worse than expected UK economic data after the action taken overnight by the RBA (Reserve Bank of Australia) shook the markets and put tremendous selling pressure on the Aussie.
Foreign exchange traders focused on sterling may have already feared a worse-than-anticipated slowdown in the UK services sector after the week’s earlier PMI results, but the result has still caused the GBP to AUD exchange rate to tumble.
The services PMI was expected to fall from 53.7 to 53.5, but instead dropped to 52.3, while the composite index slid from 53.6 to 51.9, significantly lower than the forecast printing of 53.2.
The next data likely to affect the pairing will come from Australia; current forecasts have generally been positive.
A clear imbalance exists between upcoming UK and Australian data; the only real UK contribution will be the new car registrations result for April. Australia’s more numerous and impactful data will consist of the AiG performance of construction index, as well as the RBA statement on monetary policy.
The GBP/AUD exchange rate is unlikely to rise if today's economic forecasts for the latest data releases prove accurate.
In terms of UK data, the incoming composite and services PMI are expected to fall.
On Australia’s side, the impending trade balance and retail sales results are forecast positively.
The surprise Reserve Bank of Australia (RBA) rate cut weighed heavily on demand for Australian Dollar exchange rates.
Although Aussie market sentiment improved on Wednesday, the British pound to Australian dollar exchange rate is holding relatively flat today.
Meanwhile the UK Pound is also trending lower versus many of its peers after both manufacturing and construction output slowed beyond expectations.
Latest New Zealand/Australian Dollar Exchange Rates
On Saturday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The live inter-bank GBP-GBP spot rate is quoted as 1 today.
At time of writing the pound to us dollar exchange rate is quoted at 1.249.
The GBP to NZD exchange rate converts at 2.103 today.
Please note: the FX rates above, updated 27th Apr 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.
Other Currency Exchange News
Pound Sterling (GBP) Exchange Rates Stall From 2016 Best Conversions
In the UK, the latest data from Markit / CIPS showed activity in the UK manufacturing and construction sectors at a three year low as activity slows down ahead of the 23 June referendum.
Rob Dobson, senior economist at Markit said "On this evidence manufacturing production is now falling at a quarterly pace of around 1%, and will likely act as a drag on the economy again during the second quarter and putting greater pressure on the service sector to sustain GDP growth. The manufacturing labour market is also being impacted, with the data signalling close to 20,000 job losses over the past three months."
This had a negative impact on the value of the Pound against a range of currencies including the Euro and US Dollar but was ignored by the foreign exchange market as far as the Pound to Australian Dollar exchange rate is concerned as the markets priced in a fresh 0.25% interest rate cut by the RBA (Reserve Bank of Australia) to a new all-time record low of 1.75% in response to last week’s data that showed that for the first time in seven years, there are deflationary pressures in the Australian economy.
GBP/AUD Exchange Rate Today: Political uncertainty continues to weigh on demand for the Australian Dollar.
The pressure on the Aussie increased with the latest Federal Budget in Australia which only raised speculation of a snap election in July.
Amongst the usual ‘winners’ and ‘losers’ from the various proposals, the Australian Treasurer downgraded both the growth and inflation prospects of the Australian economy.
Tomorrow sees the publication by Markit / CIPS of the activity in the all-important UK services sector for April.
The UK services sector accounts for nearly three quarters of the UK economy so any sign of a contraction in activity should prove fatal to the short term prospects for the Pound in the current foreign exchange market.
Support levels are at 1.9224 and thereafter at 1.9149 with resistance set at 1.9571.