GBP EUR Rate Gains, GBP AUD Rate Hits 12-Month High

Published: Wednesday, 5 June 2013 14:00 BST - Written by Toni Johnson

STORY LINK GBP EUR Rate Gains, GBP AUD Rate Hits 12-Month High

There have been several significant risk events of note in the global markets during the past 24hrs. Australia led the way with the release of its latest GDP growth figures during last night’s Asian session and they did not make pleasant reading for investors holding Australian Dollar-denominated assets. The data showed that activity levels in Australia’s commodity-driven economy were below analysts’ expectations thanks to a decrease in the level of inward investment in the Antipodean nation. The headline annualised Australian growth figure showed at 2.5% versus an anticipated 2.7%. The release caused market participants to increase their bets that the Reserve Bank of Australia will trim its key lending rate in the near-term, piling the pressure on an already weak Aussie.

The news sent the Pound to Australian Dollar exchange rate (currency : GBP AUD) up to its highest level for just over 12 months at 1.6081. The next significant level to the upside comes at 1.6187 – consecutive closes above this rate would mean a new 20-month high for GBP AUD, sending out a strongly bullish signal for the pair.

Elsewhere, there was a strongly positive UK data publication earlier on. The latest UK Purchasing Managers’ Index survey of Britain’s extensive services sector showed at a higher than expected level of 54.9. The April figure was significantly higher than March’s print of 52.9, providing an encouraging leading indicator for the UK’s combined tertiary industries.

Meanwhile, there were also developments of note in mainland Europe, where the European Commission confirmed earlier today that Latvia is set to be the eighteenth member of the eurozone. The Baltic state’s acceptance into the euro club was met with a mixed reception by investors who fear that the minor state’s economy bears many of the features of other eurozone peripheral states including Portugal, Cyprus and Greece which have recently run into funding difficulties. The last thing the euro area needs at this stage is another sovereign state bail-out and concerns regarding such an occurrence have sent the Pound to euro exchange rate (currency : GBP EUR) up to 1.1766 earlier on.

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TAGS: Australian Dollar Forecasts Currency Predictions Euro Forecasts Eur Forecasts