Pound Australian Dollar Exchange Rate (GBP/AUD) Drops Despite RBA Interest Rate Cut

Modified: Tuesday, 6 August 2013 09:59 BST - Written by David Woodsmith

STORY LINK Pound Australian Dollar Exchange Rate (GBP/AUD) Drops Despite RBA Interest Rate Cut

In the major overnight risk event, the Reserve Bank of Australia (RBA) opted to trim its official cash rate by 25 basis points to a fresh record low of 2.50%. In a clear example of putting the cart before the horse, investors reacted to the RBA decision by supporting the Australian unit, suggesting that the cut had already been almost fully factored-in.

The current Pound to Australian Dollar exchange rate is trading down 0.78% at 1.70939 GBP/AUD. The Australian Dollar Pound exchange rate is 0.58499 AUD/GBP.

In fact, price action for GBP AUD following the release suggests that some market participants had been anticipating a cut of 50 basis points by the RBA. If the Australian central bank had taken such an action, it wouldn’t have been for the first time in recent years. The fallout from the RBA announcement the Pound to Australian Dollar exchange rate (currency : GBP AUD) fall from a 3 year high in the 1.7200s yesterday down to as low as 1.7053 during last night’s Asian session.

Elsewhere, this morning’s session brought the publication of a slew of UK data. Expectations were high for the June Manufacturing and Industrial Production numbers and they did not disappoint. Both the manufacturing and industrial output figures significantly bettered analysts’ expectations, suggesting that Britain’s economy is now healing at an accelerated rate.

Looking ahead to the remainder of today’s trading day, investors will be afforded further information regarding the strength of the UK’s economic recovery later when the NIESR releases its July quarterly GDP growth estimate for the British economy. Analysts are anticipating an improvement on the June figure of 0.6% - anything less than this and the Pound euro (GBP EUR) and Pound Dollar (GBP USD) exchange rates could suffer renewed losses.

Elsewhere, tonight’s New Zealand employment figures have the potential to send the GBP NZD exchange rate higher once more. The consensus amongst economists is that the Q2 jobs data will show an uptick in the overall level of employment in New Zealand to 6.3% - up from 6.2% in Q1.

The current Pound New Zealand Dollar exchange rate is trading down 0.33% at 1.95297. For more exchange rates, a currency converter or to get more information on money transfers to Australia or New Zealand, please refer to the main Currency News UK website.

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