GBP AUD, GBP NZD & GBP ZAR Exchange Rates Tumble, GBP CAD Rate Climbs

Modified: Friday, 21 June 2013 14:32 BST - Written by John Cameron

STORY LINK GBP AUD, GBP NZD & GBP ZAR Exchange Rates Tumble, GBP CAD Rate Climbs

Today’s session provided investors holding Sterling-denominated assets with a sharp reminder that all is far from rosy in Britain’s real economy. A revised set of UK public finance data was released by the Office of National Statistics (ONS) earlier and they proved to be bad news for the Pound Sterling. Britain’s coalition government came to power in the middle part of 2010 with the stated aim of reducing the UK’s massive government deficit, however the updated ONS statistics published today revealed that the level of public borrowing in Britain during 212/13 increased from the £118.5bn of the previous financial year to £118.8bn.

By the middle part of the European equities session, the Pound had been outperformed by almost all of the other sixteen most-actively traded global currencies on the day thanks to the release from the ONS. This had caused the Pound to euro exchange rate (currency : GBP EUR) to dip down below the 1.1700 level once more, while Sterling gave up even further ground against the commodity-driven high yielding currencies, with GBP AUD, GBP NZD and GBP ZAR exchange rates to tumble by 0.70%, 0.31% and 0.84% respectively. Part of this movement was driven by a softening of the Pound, but a general improvement in global appetite for risk following its mid-week drop-off was behind the majority of this price action.

The one bright spot for Sterling so far today has been its showing against the Canadian Dollar. The Sterling CAD exchange rate (currency : GBP CAD) has accumulated by 0.40% to trade back into the 1.6100s following the publication of significantly lower than expected Canadian Consumer Price Index data for May. The inflation figures will reduce economists’ calls for a near-term rate hike from the Bank of Canada and may even lead some analysts to suggest that a loosening of monetary policy might be possible moving forward.

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