China Outlook Sends Pound Australian Dollar & Pound NZ Dollar Exchange Rates Down

March 10, 2014 - Written by Frank Davies

STORY LINK China Outlook Sends Pound Australian Dollar & Pound NZ Dollar Exchange Rates Down

Ecostats from Asia have stolen the limelight in the global currency markets during the weekend shutdown and early trading this week.

China remains the world’s second largest sovereign economy, so releases from the National Bureau of Statistics in the People’s Republic are always closely-monitored by currency market participants.

Saturday’s Chinese trade figures proved to be no exception to this rule; on the credit side, they revealed that the level of imports into the vast Far Eastern economy had continued to power ahead at last month, growing at an annualised 10.1%. January’s counterpart numbers painted a similar picture, disclosing that shipments into China had expanded by 10.1% versus January 2013. The release suggests that China’s policymakers are succeeding in their aim of transforming their economy into a more balanced, consumer-driven financial system. The development proved to be good news for the Commodity Dollars, as well as the South African Rand, with the Pound Australian Dollar and Pound New Zealand Dollars pulling back to 1.8389 GBP/AUD and 1.9631 GBP/NZD earlier on.

However, Chinese export figures published at the same time, proved to be a different matter altogether, revealing a shock annualised drop off in shipments out of China of a massive 18.1%. The figures raised alarm bells for investors hoping for a continuation of the pickup in the global economy, triggering a surge of safe-haven support for the Greenback which propelled the Pound US Dollar exchange rate down to 1.6622 GBP/USD.

Data released during the early hours of this morning provided further evidence of the extent to which China’s politburo has succeeded in turning round the domestic economy. Only a couple of years ago, the superpower’s policymakers were fretting about price inflation which was threatening to spiral out of control as the rate of increase of domestic food prices edged into double figures. The subsequent tightening of economic policy from China, along with an attendant dip in global commodity prices, has seen the headline measure of price rises steadily fall back in recent months. Today’s figures showed that the year-on-year level of CPI inflation had dropped back to a more than manageable 2.0% last month. The news is likely to allow China to relax its monetary policy, further favouring the Pound to Australian Dollar (GBP AUD) and Pound New Zealand Dollar (GBP NZD) exchange rates.

Important Pound Sterling, New Zealand Dollar & Australian Dollar Exchange Rates (Updated: 20:00 GMT 10/03/2014)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.12% at 1.84536 GBP/AUD.
The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.52% at 1.96477 GBP/NZD.
The Euro to Australian Dollar exchange rate is trading up +0.39% at 1.53842 EUR/AUD.
The Euro to New Zealand Dollar exchange rate is trading down -0.01% at 1.63796 EUR/NZD.
The US Dollar to Australian Dollar exchange rate is trading up +0.39% at 1.10862 USD/AUD.
The US Dollar to New Zealand Dollar exchange rate is trading down -0.01% at 1.18035 USD/NZD.

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