Pound to Australian Dollar (GBP AUD) & US Dollar (GBP USD) Exchange Rates Climb

September 10, 2013 - Written by Ben Hughes

STORY LINK Pound to Australian Dollar (GBP AUD) & US Dollar (GBP USD) Exchange Rates Climb

The GBP AUD exchange rate posted gains on the day yesterday and GBP USD also climbed. Most analysts had expected a downside move for both pairs, but the market had other ideas.

The Pound Australian Dollar exchange rate (GBP/AUD) is currently trading up by 0.10% at 1.7005 GBP/AUD. The Australian Dollar Pound exchange rate is currently trading at 0.5881 AUD/GBP.

Yesterday’s session in the currency markets brought a light schedule of data releases from the world’s leading economies, but that didn’t stop some interesting price action taking place for more than one of the major global currency pairs.

The consensus amongst analysts in the lead-up to Saturday’s Australian general election was that victory for the Liberal / National coalition would be Australian Dollar positive. However, the support for the Aussie which Sunday’s announcement that the opposition, led by Tony Abbott, had indeed won a landslide victory, proved to be ephemeral, with the Pound Australian Dollar exchange rate climbing from an intraday low in the mid-1.6900s up to close to the 1.7100 level during trading yesterday.

Abbot’s centre-right alliance was elected on a business-friendly ticket which contained a key pledge to repeal the nation’s mining tax which many Australians partly blame for the slowdown in activity in the nation’s extraction industries during 2013. The fact that the Aussie has lost ground against Sterling following the result illustrates that the difficulties that the Australian economy faces are deep-set – Sunday night’s disappointing Chinese Import data for last month bears testimony to this.

Elsewhere, in another apparently counter-intuitive move, the Pound US Dollar exchange rate (GBP/USD) climbed to its highest level since 17th June at 1.5733 during yesterday’s session. With the US Federal Reserve due to announce its latest policy decision next week, and with most analysts still anticipating that this will bring news of a reduction in Quantitative Easing, by rights the Buck should be strengthening. Yesterday’s softening of support for the Greenback was driven by continued indecision from US policymakers regarding their nation’s response to chemical attacks in Syria.

As ever, the market abhors a vacuum, and with President Obama favouring military strikes against the Assad regime, while the majority of representatives in the US lower house vehemently opposed to such an action, support for the Dollar ebbed throughout the European trading day. It took an unexpected intervention from an unlikely source to halt the move against the Buck – Russia’s direct request to Syria to surrender its stock of chemical weapons with the agreement that they should be destroyed appears to have provided the US President and the US Dollar with a relatively easy ‘out’ and some much-needed respite.

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