Pound to Australian Dollar exchange rates have climbed since concerns for the Australian housing market resurfaced. Poor Chinese data overnight added further salt to the Aussie's wounds. The below table shows the difference you could have received when trading between the high and low point of the last month.
|Currency Pair||% Change||Difference on £200,000|
The Australian Dollar weakened further throughout the course of yesterday against the Pound, providing our clients with one of the best opportunities to purchase AUD in 7 months. This was following from Tuesday’s positive UK PMI (Purchasing Managers Index) data and continued after further positive UK construction PMI data was announced yesterday. Although Australian economic data has been relatively positive of late, with the service sector showing growth in April due to the tourism sector picking up pace, the decline for the AUD has been continuing this week since the RBA announced on Tuesday that they would keep interest rates on hold at 1.5% for the ninth month in a row.
Overnight the Aussie weakened further against GBP, EUR and USD after Australian Trade Balance data and Chinese Services PMI data were released worse than expected. As China is the largest trade partner to Australia, any negativity from this economy is reflected in Australia. However, RBA Governor Phillip Lowe helped to recover some of these losses in a speech tackling house prices and consumer debt. He said that ‘over time we could expect Interest Rates to rise in Australia and should not expect them to always be this low’.
We should see some elaboration on this topic during the RBA policy statement in the early hours of tomorrow morning.
Focus will continue to be on the Australian housing sector also in the early hours of tomorrow morning when New Homes Sales data for April is released by the Housing Industry Association. As this sector showed a decline in March, any additional contraction in April could weaken the Aussie further and present AUD buyers with yet another excellent opportunity to capitalise on.
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