The pound has been reasonable steady against the Australian dollar over the last 36 hours. The release of a UK industry report showed recovery in house prices therefore easing the possibility that the Bank of England will be lowering interest rates.
The pound has gained the most against the weak US DOLLAR reflecting in a slightly stronger
AUSTRALIAN DOLLAR price of 2.3045. A strong Aussie dollar sees GB POUND /AUD open this morning largely unchanged at 2.3038 temporarily moving below this figure to 2.2900 and then rapidly back to the current rate of 2.3050.
Markets will now be looking forward to next Thursday’s UK interest rate decision for further direction on the UK economy. VFX expect the rate to move between GBP/AUD rate of 2.3000 and 2.3100 going into the weekend.
The Sterling (GB POUND) failed to pair any of its losses against the Euro, with the possibility the Bank of England may cut interest rates in the near future, in order to counter a slowing economy after recent credit and banking problems.
Sterling was able to find some support in early trading against the Australian Dollar (AUD) with a move up to 2.3400 from Friday’s close of 2.3164. Sterling continued to make up ground against the US dollar on Friday as continuing speculation over the US Fed’s next interest rate move buoyed the UK currency.
After flat trade in Asian markets, GB POUND / US DOLLAR made a steady appreciation across European and US trade to open this week over a cent higher at 2.0210. A quiet night ahead on the data front will likely see sterling taking direction from US interest rate speculation as well as any news on the UK’s stance for interest rates.
We expect the exchange rate to move between 2.33 and 2.34
The Pound Sterling seemed destined to continue its recent run lower when the unexpected happened in the US yesterday.
The US federal reserve cuts interest rates by 0.5% triggering big gains in sterling against the
US DOLLAR well into 2.0100. This however was not enough for the cross rate (Australian Dollar) with a move down by two and a half cent against the Aussie dollar seeing the rate move from 2.4000 down to 2.3400 in one day.
A whole lot more expensive buy for UK sellers. It was the local currency's biggest overnight rise this year. The Aussie dollar rose as a result of the aggressive move by the Fed aimed at stimulating a flagging US economy and easing credit market liquidity in response to US sub-prime mortgage woes.
Westpac Bank chief currency strategist Robert Rennie said a high and widening yield spread meant the Australian dollar had been well positioned to benefit from a weaker US dollar. "It's a pretty good close and I would expect further demand out of Europe for the Aussie dollar, ." as highlighted by Reserve Bank governor Glenn Stevens.
GB POUNDS / AUSTRALIAN DOLLAR is now trading at 2.3500 this afternoon, a distance away from yesterday’s opening exchange rate.
The British pound has suffered a massive sell-off against the worlds’ major currencies as news that Northern Rock’s crisis continues to grow. Adding fuel to the fire was Rightmove’s September house price report which showed a fall of nearly 2% in the month of August.
Meanwhile the Australian dollar remains well bid against the US Dollar as we await the results from the big investment banks in the US this week. Expect some pretty horrific numbers to come out as we begin to see who is holding the bag as a result of the sub-prime crisis.
GB POUNDS / AUSTRALIAN DOLLAR has dropped to the 2.37 level and we can expect a wide range today depending on how the Northern Rock crisis plays out.
Expect anything between 2.34 and 2.40 on Sterling / Aussie today.
GB POUND /AUSTRALIAN DOLLAR has slipped back to the 2.40 level as Sterling suffers the aftershocks of the Bank of England bailing out Northern Rock. As the credit crisis spreads we naturally assume the BOE will start loosening monetary policy by the end of the year. Foreign investors have also been spooked by Northern Rocks disclosure and many will begin to wonder about the stability of the housing market here in the UK as lenders pass on higher rates to consumers.
Consumer Confidence Rises in Australia pushes AU DOLLAR higher
An index of consumer sentiment in Australia rose 4.2% in September from August. The index rose 14.3% from its year ago level and 13.9% above its 20-year average.
The rebound follows an 8.1% drop in confidence in August after the Reserve Bank of Australia raised official interest rates for the first time in 2007 on Aug. 8.
The RBA's decision to keep its official cash rate at 6.50% in September would have boosted the mood of consumers, Evans said.
"Steady interest rates; a modest fall in petrol prices and continuing good news on the
labour market and the broader economy would have been the supporters of the index. The factors have clearly offset any concerns emanating from global financial markets," he said in a statement.
These figure have helped push the Aussie dollar higher against the US
DOLLAR and GB POUND as investors seeking higher yields buy the
AUSTRALIAN DOLLAR. Is the carry trade back on?
We expect the GBP/AUD to trade in a range of 2.4250 to 2.4450
Sterling (GBP) gained against the US dollar on Friday as the currency eased to 15 year lows against a basket of major currencies. Non Farm Payrolls data (jobs created in the US outside the agricultural industry) for the month of August declined for the first time in four years, by 4k jobs. Poor jobs data added to the notion that the U.S. economy may be heading into a recession placing pressure on an interest rate cuts with the markets showing a 74% chance that the Fed slashes its 5.25 percent benchmark interest rate by half a percentage point when it meets on Sept 18. The Australian Dollar
(AUD) remained steady despite its role as a high yielding currency, attractive for investors. Overall the AUD traded within a range of a 2.44 to 2.46 on Friday and opened this morning weaker at 2.4800 but quickly moving down to today’s current levels of 2.4650. The rate looks comfortable at the moment around 2.4500 and has remained above2.4300 since the 15th August 2007, making anything above 2.4000 an attractive level.
7th September 2007
The Australian Dollar (AUD) saw the unemployment rate remain steady at 4.3%, finding support on new jobs rising 31k.
The attractiveness of high yielding currencies like the Australian and New Zealand dollar is slowly returning; but the fallout from the US Sub prime crisis still lingers, with caution being the key word. Despite some the fairly positive numbers out of the US last night (US Productivity and Weekly Jobless Claims), Aussie rallied in late European and New York trading.
Great Britain Pound: The Pound took heavy falls against the US dollar overnight before speculation in the lead-up to tonight’s job figures reversed the unit’s fortunes. GBP/USD traded steadily around 2.02 across Asian trade before Europe brought the pair to a low of 2.0140. Increasing speculation that tonight’s payrolls data will show a spill over of sub prime fallout into the jobs market saw the pair rebound quickly to post a high of 2.0266. While GBP/USD opens this morning at 2.0238, GBP/AUD slipped overnight to open this morning at 2.4418.
We expect a range today in the GBP/AUD rate of 2.4370 to 2.4470
Great Britain Pound has moved down against the Aussie from Friday’s high of 2.4852. An uncertain interpretation of US Fed chairman Ben Bernanke’s speech on Friday initially saw
GBP/USD peak at 2.0232 before slipping quickly to 2.0107. While sterling has since bounced to open largely unchanged against the USD at 2.0142, it has made small gains against the Australian dollar and opens this morning at 2.4606 moving sown in to 2.4540 at 9.40am. Although a short week in the US (Public holiday, today), the markets will have plenty of economic data to get their teeth into over the few days. In the UK, the Bank of England’s MPC is expected to leave interest rates at 5.75 percent at its meeting on Thursday. With many market observers predicting a further rate rise for September back in June/July it seems the Global credit crunch may have done the job for the MPC and rates will remain on hold.
- We expect a range today in the GB POUNDS / AUSTRALIA DOLLARS rate of 2.4500 and 2.4600
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