Pound Australian Dollar Exchange Rate (GBP AUD) Down As Investor Sentiment Remains Buoyant

Published: Wednesday, 9 January 2013 14:00 BST - Written by David Woodsmith

STORY LINK Pound Australian Dollar Exchange Rate (GBP AUD) Down As Investor Sentiment Remains Buoyant

On the face of it, this morning’s UK trade balance data for November provided further cause for pessimism regarding the future prospects for Britain’s economy. The figure showed that the UK’s total trade gap stood at a whopping £3.466bn the month before last – well ahead of analysts’ expectations of a showing of £3.00bn. Members of the UK’s ruling coalition government are likely to attempt to place a positive spin on the data by pointing out that it shows a narrowing of Britain’s trade gap, (October’s counterpart figure came in at £3.729bn).

What can’t be glossed over is the fact that the UK’s debt-burdened economy is sucking in a vast amount more imports than the combined value of its exports – hardly an endorsement of the coalition government’s pledge to work towards a more balanced economy via a rejuvenation of the domestic manufacturing base.

The Pound has leaked support against almost all of the other sixteen most actively traded currencies in the aftermath of this morning’s import/export figures. The Pound Euro exchange rate (currency : GBP EUR) has lost only a small amount of ground and has held steady in the middle part of the 1.22s. However, Sterling has recorded more pronounced losses against the Australian Dollar; GBP AUD has eased to 1.5230 ahead of this afternoon’s New York open. The shift lower for the pair has come in spite of a weaker than anticipated set of Australian Retail Sales figures for November, which showed a surprise monthly contraction in Australian shop sales. The disappointing Australian numbers have been more than mitigated by a decent performance from global share markets so far today. The prevailing ‘risk-on’ trading environment has favoured the risk-sensitive Australian tender.

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