Pound to Australian Dollar & New Zealand Dollar Exchange Rates Spiral As Investor Sentiment Plummets

Modified: Tuesday, 20 August 2013 16:51 BST - Written by John Cameron

STORY LINK Pound to Australian Dollar & New Zealand Dollar Exchange Rates Spiral As Investor Sentiment Plummets

The Pound has posted strong gains against the Australian and New Zealand Dollars today. Further losses for Asia’s stock markets have driven the move against the Commodity Dollars.

The Pound Australian Dollar exchange rate is currently trading up 0.72% at 1.7274 GBP/AUD. The Australian Dollar Pound exchange rate is currently trading at 0.5789 AUD/GBP.

Global stocks have taken a hit, registering further losses over the past 24 hrs. Both leading Asian indices overnight gave up over 2% of their value. Tokyo’s Nikkei 225 incurred the heaviest losses in the Far Eastern trading day, slumping by 2.63% on the session, while Hong Kong’s Hang Seng was not far behind, dropping by 2.20%.

Risk aversion in the markets caused the usual suspects to incur hefty losses, with the Pound Australian Dollar exchange rate (currency : GBP AUD) trading higher by almost 1% in the early part of this morning’s European session to touch 1.7333, while the Pound New Zealand Dollar exchange rate (currency : GBP NZD) spiralled to as high as 1.9672 earlier.

The shift out of Australian Dollar was partly attributable to the generalised move away from risk-laden assets, but last night’s publication of the minutes of the Reserve Bank of Australia’s August meeting really drove the knife into the Antipodean tender. The memos of the RBA’s August get-together revealed that the Australian central bank’s policy committee feel that any decision to cut domestic interest rates later this year will be largely driven by the relative value of the AUD. It would appear that the RBA wants a weaker Aussie Dollar and that, one way or the other, this is likely to be what it achieves.

Meanwhile, the Australian Dollar’s sister currency, the New Zealand Dollar, also posted a poor performance on the day, sending GBP NZD sharply higher. The Kiwi lost ground thanks to an announcement from the Reserve Bank of New Zealand that it will be introducing tougher than anticipated controls on low equity home loans. The net stop for GBP NZD, should its current upward trend continue, comes as the well-tested band of resistance at the two to one threshold.

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TAGS: Australian Dollar Forecasts Daily Currency Updates New Zea Forecasts