Pound Australian Dollar Exchange Rate (GBP/AUD) Tumbles On Strong Australian GDP Data

September 4, 2013 - Written by John Cameron

STORY LINK Pound Australian Dollar Exchange Rate (GBP/AUD) Tumbles On Strong Australian GDP Data

The Sterling Australian Dollar exchange rate (GBP/AUD) has tumbled so far today in spite of data which showed that activity levels in the UK’s services sector have hit a six year high. The Australian Dollar has outperformed the Pound thanks to a strong set of domestic Q2 GDP data.

The Pound Australian Dollar exchange rate (GBP/AUD) is currently trading down by 0.95% at 1.7025 GBP/AUD. The Australian Dollar Pound exchange rate is currently trading at 0.5874 AUD/GBP.

The past 24hrs have brought further pronounced price action for the Pound Australian Dollar exchange rate (GBP/AUD) following the publication of key data sets in the UK and Australia. As is so often the case, Australia led the way during the overnight Asian session with the release of Q2 GDP data which showed that the Antipodean economy had expanded by an annualised 2.6% during the three months to the end of June. This was well ahead of expectations of a showing of 2.4% and higher than Q1’s counterpart print of 2.5%. The implication is that the slowdown in economic activity which the Australian economy endured in the wake of the dip in commodities prices over the past two years now appears to be coming to an end.

Meanwhile, in the UK, this morning’s session also brought a highly encouraging data release, with this month’s PMI Survey of Britain’s services sector revealing that activity has hit a six year high. The number is closely-watched by investors given the fact that around 75% of the UK’s annual GDP takes place in the services sector. However, the positive showing couldn’t stop the Pound losing significant ground against the Australian Dollar on the session, sending the GBP AUD exchange rate (GBP/AUD) down to as low as 1.7014 earlier.

The next key risk event of note for the pair comes tomorrow lunchtime when the Bank of England announces its latest policy decision. UK interest rates and Quantitative Easing are highly likely to remain at their current levels, however institutional investors remain wary of holding Sterling-denominated assets in the leadup to the release due to fears that the BoE may once again publish a Sterling-negative forward guidance statement alongside the interest rates / QE announcement.

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