British Pound to Australian Exchange Rate Today - GBP AUD Continues to Trade in Tight Range

July 28, 2014 - Written by David Woodsmith

STORY LINK British Pound to Australian Exchange Rate Today - GBP AUD Continues to Trade in Tight Range

The British Pound Sterling (GBP) was only slightly firmer against the Australian Dollar (AUD) exchange rate on Monday and the currency pair was unlikely to experience much in the way of movement due to a very quiet trading session in terms of market moving economic data releases. The GBP AUD currently stands at 1.80472.

Sterling remains supported from last week’s news that the UK economy returned to pre-financial crisis levels in the second quarter of the year. According to the Office for National Statistics, the UK’s gross domestic product expanded by 3.1% on an annual basis and by 0.8% on a quarter on quarter basis. The data also showed that the UK’s service sector was the only part of the economy to surpass its pre 2008 peak. The service sector comprises 80% of the UK economy.

The Pound Sterling is likely to experience a quiet week in general this week with only Friday offering anything in the way of important economic data releases. Tuesday will see the release of the latest UK Mortgage approval, mortgage lending and BOE consumer credit data. Friday sees the release of the latest Markit/CIPS Manufacturing PMI.

Sterling came under some pressure over the weekend as a number of UK businesses profit warnings. The number of warnings increased to the highest level in three-years as the strong Pound was blamed for harming export businesses.

Keith McGregor at EY said: "The pound's rapid rise is one of the biggest pressures on earnings, although the problem highlighted in profit warnings isn't one of sales but of currency translation. Recent history shows that UK exports are relatively insensitive to currency effects. However, the pound's leap to multi-year highs has caught out a number of companies who translate foreign earnings back into pounds."

He said the second half was likely to pose more challenges than the first. "Central bank actions have helped to quash volatility, pushing asset prices to pre-crisis highs. However, the countdown to a new monetary era will bring new tests and greater volatility as markets begin to reprice in risk."

The Australian Dollar meanwhile softened against the US Dollar as strong durable goods data out of the USA last week strengthened the ‘Greenback’. Last Friday the Commerce Department released a report which showed that durable goods orders rose by 0.7%.
Traders will now be eyeing the upcoming US employment report due later in the week and the Federal Reserve’s latest interest rate and policy meeting. Important data is also due for release out of China.

The Aussie fell after the US dollar rallied on the back of Euro weakness, Easy Forex currency dealer Milica Nikolic said. “The Aussie didn’t move too much today ahead of some major data out from the US later this week,” she added.

Data releases for the AUD-

Tuesday July 29th – HIA New Home Sales

Thursday July 31st – Australian building permits
Private Sector Credit MoM/YoY

Friday August 1st – Australia PPI
AIG Manufacturing Index
Chinese NBS Manufacturing PMI

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