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Pound to Aussie / NZ Dollar -Tesco (TSCO) and Barclays (BARC) Share Prices Send GBP/AUD and GBP/NZD Exchange Rates Stronger

September 23, 2014 - Written by John Cameron

A bad day for UK share prices has seen analysts upwardly amend their future currency forecasts for the Pound to Australian Dollar exchanege rate (GBP AUD) and Pound Sterling to New Zealand Dollar (GBP NZD) conversion rates. However, economists predict that the forward move for these pairs could be short-lived.

Bad news for big British businesses sent London’s FTSE 100 share index sliding during today’s session. The fallout from Tesco’s (TSCO) embarrassing accounting error, which saw the UK supermarket giant reveal yesterday that it had over-reported its latest profit figures by a whopping £250m, saw its shares shed almost 5% on the day.

Meanwhile, another UK blue chip added to the British share market malaise; banking behemoth Barclays (BARC) shed 1.18% of its value today following the announcement that it had been fined £38m by the UK financial regulator for its failure to keep its clients’ money in separate bank accounts to its day-today facility.

Looking at the bigger picture, the generalised mood in the markets on the day was fervently ‘risk-off’ as investors priced-in the overnight news that US-led forces had launched air strikes on Islamic State targets in Syria. The atmosphere of risk aversion was augmented by legislation passed in the US last night which made it considerably more difficult for American companies to re-locate their headquarters in the United Kingdom in an effort to avoid onshore taxes. The tax dodge, known as an ‘inversion’ has been the trigger for much take-over speculation centred on some of Britain’s leading companies in recent months. The dampening of such market whispers added to the pronounced did on the day for London shares which saw the FTSE 100 close down by a hefty 1.44%.

The flight to safety on the session caused the Pound Sterling (currency:GBP) to register strong gains against the Commodity Dollars. The Pound News Zealand Dollar exchange rate jumped to as high as 2.0328 GBP/NZD on the day, while the Pound Australian Dollar exchange rate had clawed its way up to as high as 1.8515 a short time ago - this represented the pair’s highest trading rate since the middle part of March.

However, the lack of risk appetite which marked the European trading day has not been mirrored in the US, where the broad-ranging S&P 500 was trading only marginally lower during the middle part of the New York morning session. If appetite for risk remains buoyant into tomorrow, then expect the GBP AUD and GBP NZD exchange rates to give up today’s gains tomorrow.

Latest Pound, Aus & NZ Dollar Exchange Rates Today



The Pound Sterling to Australian Dollar exchange rate is trading down -0.22% at 1.84764 GBP/AUD.
The Pound Sterling to New Zealand Dollar exchange rate is trading up +0.15% at 2.03276 GBP/NZD.
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The Pound Sterling to US Dollar exchange rate is trading up +0.03% at 1.64001 GBP/USD.
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