GBP AUD & GBP NZD Rates Spiral As Share Markets Plummet

Published: Thursday, 6 June 2013 09:00 BST - Written by John Cameron

STORY LINK GBP AUD & GBP NZD Rates Spiral As Share Markets Plummet

Yesterday’s North American session brought wild fluctuations in the value of several of the sixteen most-actively traded currencies, with the high-yielders, in particular, taking a pounding. The shift in market sentiment was driven by the prevailing ‘risk off’ trading environment, which saw global shares give up a significant amount of ground. The net effect saw London’s FTSE 100 tumble by over 2% on the day, while the eurozone’s bourses gave up only slightly less of their value. It was a similar story in the States, where the broad-based S&P 500 was trading down by almost 1% by the middle part of the session.

In the currency markets, the big losers on the day were the Antipodean Dollars. This caused a marked accumulation in both the Pound to Australian Dollar exchange rate (currency : GBP AUD) and in the Pound to New Zealand Dollar exchange rate (currency : GBP NZD), which rose as high as 1.6186 and 1.9422 respectively.

As has so often been the case over the years, yesterday’s flight to safety was driven by disappointing data releases in the USA. May’s edition of the ADP Employment Change figure printed at 135,000 versus analysts’ expectations of a showing of 165,000, while April’s US Factory Orders data came in at 1.0% when a figure of 1.5% was anticipated.

The US job creation number was particularly badly received by investors, perhaps due to the fact that they have half an eye on Friday’s key US Non-Farm Payrolls data release, which is traditionally the single most significant publication of any month. The consensus amongst economists is that Friday’s NFP number will show that 168,000 jobs were created in the vast US economy last month. Anything below this result would surely further diminish global risk appetite, sending GBP NZD up towards the significant two to one threshold and the GBP AUD rate northwards again.

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TAGS: Australian Dollar Forecasts Daily Currency Updates New Zea Forecasts