GBP/AUD Drops to 2.05
The Australian dollar has continued its impressive run against the pound after the release of better than expected Australian GDP figures and an upbeat speech by the president of the Reserve Bank of Australia, Glenn Stevens. The graph below shows GBP/AUD movement over the last 7 days.
GBP/AUD exchange rate graph
Figures released on Wednesday morning showed Gross Domestic Product had expanded by 0.9% for the quarter ending September, better than the 0.8% expected by most analysts. The annual rate of 2.5% was also better than the 2.4% forecasted and the Australian dollar gained against both the US dollar and the pound, continuing on its recent strong run. The positive figures continued the recent trend of better Australian data following upbeat housing construction data on Tuesday.
The Australian dollar has now gained significant ground against both the US dollar and the pound in the last month, gaining four cents over sterling in the last few days alone. The move has come despite the sharp fall in the price of iron-ore, Australia’s main export. The price of the metal has fallen over 30% since the start of September, now fetching just over $40 dollars per tonne.
The Australian dollar has been helped on its way by an upbeat speech from the president of the Reserve Bank of Australia, Glenn Stevens, on Wednesday morning. Stevens painted a fairly positive picture of the economic situation in Australia, reflected in the recent positive data releases. It now seems that the decision to keep interest rates on hold for the time being may have been the correct one.
On the sterling side of the cross, there’s not a great deal to report. Over in Europe, the euro has taken centre stage as all eyes are on Mario Draghi and the ECB conference scheduled for Thursday. It’s been widely rumoured that Mario Draghi may announce an interest rate cut by the European Central Bank and a possible expansion to the current quantitative easing programme. If this is indeed announced on Thursday, we may well see the pound strengthen up and European investors seek a safer alternative to the beleaguered euro.
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