Pound to Australian Dollar Exchange Rate Edges Higher Following Dovish RBA Minutes

Modified: Wednesday, 22 February 2012 07:47 BST - Written by Frank Davies

STORY LINK Pound to Australian Dollar Exchange Rate Edges Higher Following Dovish RBA Minutes

The Pound to Euro (GBP EUR) exchange rate is 1.1918. The Pound to US Dollar (GBP USD) exchange rate is 1.5800. The Pound to Australian Dollar (GBP AUD) Exchange rate is 1.4792.

Yesterday’s major story in the currency markets was once again provided by Greece’s seemingly never-ending debt crisis. Observers may have expected Monday night’s announcement from the eurogroup of Finance Ministers that the troubled Hellenic state had qualified for the next €130bn of bail-out funding to calm the markets. However, the market reaction was far from positive, with the FTSE 100, Frankfurt’s Dax share index and Paris’s Cac 40 all closing down on the day yesterday.

The muted reaction to the deal would appear to be due to the onerous conditions which the eurogroup have placed on Greece in order for it to receive the funding. These have included a group of ‘monitors’ who are to be present in Athens on a semi-permanent basis to ensure Greek authorities accurately report the extent of the spending cuts and tax increases. Such a move hints at a lack of trust between Greece and its eurozone partners, which led many commentators to question Greece’s commitment to the ‘eurozone project’ and the eurozone’s commitment to Greece.

Elsewhere, there was positive news for the Pound, with the release of official Office of National Statistics data which showed that Britain’s coalition government had managed to repay £7.75bn of the UK’s national debt last month. Global markets remain sold on the age-old idea of ‘sound money’, so the news is likely to see Sterling supported over the short-to-medium term.

Meanwhile, the Australian Dollar came under significant selling pressure in the early part of yesterday’s European session, following the release of surprisingly dovish Reserve Bank of Australia minutes which hinted that Australia’s central bank may look to cut domestic interest rates sooner rather than later. This saw the GBP AUD exchange rate climb to an intraday high of 1.4842.

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