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Pound Sterling (GBP) Slides Against Australian Dollar (AUD) and Swiss Franc (CHF) on Weak GDP Data

March 2, 2016 - Written by David Woodsmith

Australian Dollar Exchange Rates Gain on Positive GDP Growth



Two strong Gross Domestic Product data sets from opposite sides of the world have provoked movement in the global currency markets today. The Australian version, published shortly after midnight UK time, led the way, revealing a year on year level of domestic economic growth of a healthy 3.0% during the final three months of 2015.

Analysts had been anticipating an annualised showing of only 2.5%, so the result helped the Australian Dollar. The fact that the official statistics also brought an unexpected upward revision to 2.7% for the Q3 counterpart GDP data provided the Australian unit with further upside and the Pound Sterling Australian Dollar exchange rate dropped to as low as 1.9264 GBP AUD as a consequence.

Analysts universally applauded the Australian growth numbers, with David de Garis of NAB concentrating on the effect the numbers might have on the Reserve Bank of Australia’s next move. De Garis noted that, ‘given Australia is going through the biggest mining pullback in our lifetimes, this is a pretty good outcome,’ before observing that, ‘our baseline is that the RBA is done cutting, and these numbers only support that view.’

Meanwhile, Felicity Emmett of ANZ Bank took a slightly different view, observing that, ‘the economy clearly finished 2015 on a strong note, but we are not out of the woods yet. The unemployment rate remains elevated and further inroads are necessary before the RBA can sit back and feel as though its job is done.’

GBP/CHF Exchange Rate Gains despite Positive Swiss GDP Data



Elsewhere, the latest Swiss GDP data was published at 0645hrs GMT this morning. These growth numbers also significantly beat analysts’ expectations, revealing an annualised pace of growth of 0.4% versus an expected 0.1%.

The numbers, although unspectacular, were enough to send the Pound Sterling Swiss Franc exchange rate down to an intraday low of 1.3884 GBP CHF.

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However, the pair encountered some technical resistance at this level and soon retraced back above the psychologically significant 1.4000 threshold, in part thanks to the fact that the likelihood is that forthcoming ECB easing will prompt the SNB to respond with looser policy as well.
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