Australian Dollar Rate Today - AUD Trends Lower vs GBP, EUR & NZD as Exchange Rate Markets Resume

October 12, 2014 - Written by Toni Johnson

STORY LINK Australian Dollar Rate Today - AUD Trends Lower vs GBP, EUR & NZD as Exchange Rate Markets Resume

The UK Pound to Australian Dollar exchange rate (GBP to AUD) climbed last Friday after the International Monetary Fund (IMF) warned that global stagnation is a possibility if economic growth doesn’t improve.

The UK saw its trade deficit shrink on Friday, while UK Construction Output was recorded to slump in August.

Australian Home Loans contracted by -0.9% in August after July’s 0.3% growth. The following currency rates were updated 13/10/2014:

The Pound to Australian Dollar exchange rate converts -0.59 per cent lower at 1 GBP is 1.84351 AUD.
The Euro to Australian Dollar exchange rate converts -0.3 per cent lower at 1 EUR is 1.45228 AUD.
The US Dollar to Australian Dollar exchange rate converts -0.59 per cent lower at 1 USD is 1.14563 AUD.
The New Zealand Dollar to Australian Dollar exchange rate converts -0.2 per cent lower at 1 NZD is 0.90054 AUD.
The Singapore Dollar to Australian Dollar exchange rate today is converting -0.31 per cent lower at 0.90130 SGD/AUD.

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Australian Dollar Dips Against the Pound and Euro on Global Growth Concerns

This week the IMF cut its forecasts for global growth and predicted another five years of stagnation.

The IMF warned that some nation’s economic recoveries were not as strong as they need to be to return to pre-crisis levels.

The report stated: ‘Although downside risks have diminished overall, lower-than-expected inflation poses risks for advanced economies, there is increased financial volatility in emerging market economies, and increases in the cost of capital will likely dampen investment and weigh on growth. Advanced economy policymakers need to avoid a premature withdrawal of monetary accommodation.’

The Reserve Bank of Australia (RBA) maintained its 2.50% interest rate on Tuesday. RBA Governor Glenn Stevens commented that the central bank was concerned about the Aussie value, the prospect of the Chinese economy slowing down and softer commodity prices.

Stevens stated: ‘The exchange rate has declined recently, in large part reflecting the strengthening US Dollar [USD], but remains high by historical standards, particularly given the further declines in key commodity prices in recent months. It is offering less assistance than would normally be expected in achieving balanced growth in the economy.’

However, following the overnight IMF statements the Australian commodity currency fell as investors sought safe-haven assets.

Forex expert Ray Attrill commented: ‘If you wanted to sum up the last 24 hours, it’s been purely risk-off. And there’s strong correlation between movements in volatility and movements in the ‘Aussie’ Dollar.’

Pound Sterling (GBP) Offered No Domestic Data Support

The Pound (GBP) meanwhile has been offered little encouragement from the shrinking UK trade deficit.

The UK Balance of Trade dropped from -£3079 to –£1917 as imports fell in August. However, UK exports fell to their weakest levels in the latter four years as a result of declining oil and chemical orders.

In recent months British businesses have appealed to the government for help in boosting overseas sales.

Domestic demand has helped to improve the UK economy in the past year and a better export market could help the UK recovery increase momentum.

Director General of the British Chambers of Commerce, John Longworth, stated: ‘We know we have a trade challenge—a stubborn trade deficit, and falling global market share. It is the one area of the economy in which we are not succeeding.’

Meanwhile, the UK Office of National Statistics (ONS) recorded that Construction Output contracted in August by -3.9% after July’s 1.9% growth.

However, Markit’s recent measure on construction in the UK reached 64.2 index points – a figure which suggests expansion is still taking place. Any figures over 50 suggest expansion whereas below denotes contraction.

Markit Economist Chris Williamson suggested: ‘We suspect this is a wholly inaccurate representation of the sector’s health, and that construction in fact continues to boom.’

With no other data releases for either the UK or Australia over the rest of Friday the GBP to AUD exchange rate may exhibit limited movement.

Developments in global politics or any influential statements from the IMF conferences could impact both the Pound and the Australian Dollar.

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