Pound Sterling to Australian/New Zealand Dollar Exchange Rates Suffer Significant Losses

Modified: Tuesday, 2 July 2013 07:43 BST - Written by Toni Johnson

STORY LINK Pound Sterling to Australian/New Zealand Dollar Exchange Rates Suffer Significant Losses

Appetite for risk came flooding back into the market during the latter part of yesterday’s session following the decidedly ‘risk off’ trading environment which was prevalent on Friday. The shift back into riskier assets by market participants during the second half of the North American trading day was largely due to a stronger than anticipated ISM Manufacturing survey for June, published in the US at 1500hrs BST.

May’s edition of the closely-monitored gauge of activity levels in the world’s premier economy’s manufacturing base had severely disappointed analysts, printing at a dismal 49.0. With anything below a 50 reading signifying contraction, the survey had provided considerable cause for concern for investors holding US Dollar-denominated assets. However, yesterday’s ISM print showed a marked recovery, registering at 50.9.

The positive US data release sent global stock markets and the high-yielding currencies strongly higher. The broad-ranging S&P 500 index in Chicago closed up by a healthy 0.54%, while London’s headline FTSE 100 gained almost 1.50% on the day, largely because it closed only 90 minutes after the American manufacturing figure was released. The Pound to Australian Dollar exchange rate (currency : GBP AUD) and the Pound to New Zealand Dollar exchange rate (currency : GBP NZD) suffered significant losses on the day, dropping by 1.02% and 0.95% on the day respectively.

Today brings a quieter roster of data releases, meaning that investor focus is likely to switch to Thursday’s Bank of England and European Central Bank policy announcements. It would appear unlikely that the new BoE Governor Mark Carney will want to rock the boat too much at his first monetary policy committee meeting, making a maintenance of the current status quo the most likely outcome for Thursday’s announcement. We will learn more regarding Carney’s future intentions when the minutes of this week’s MPC get-together are released towards the end of the third week of this month.

Foreign exchange rates mentioned in this article are trading as follows: Pound to Australian Dollar exchange rate: 1.66037 GBP/AUD (+0.84%), Pound to New Zealand Dollar: 1.95530 GBP/NZD (+0.58%) and Pound to Canadian Dollar exchange rate: 1.60069 GBP/CAD (+0.17%)

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