The value of the Australian Dollar in the eyes of investors has been relatively high of late, thanks to positivity from both domestic and foreign data releases.
The Pound has been similarly strong against its peers, although the latest UK economic data has not been as supportive as it first seemed.
Australian Economic News: Chinese Optimism and Fed Comments Combine with Supportive Domestic Data
The most recent movements of the Australian Dollar have been firmly positive, with gains including 0.3% against the Canadian Dollar (AUD/CAD), 0.4% against the Pound (AUD/GBP) and 0.9% against the New Zealand Dollar (AUD/NZD). This represents a positive repeat performance from the ‘Aussie’ relative to the previous week.
The latest sources of support for the Australian Dollar have come from China, the US and Australia itself.
In the first instance, Chinese foreign direct investment has been positive on the year in April against forecasts, while a recent estimate from the State Information Center has forecast 6.7% growth in Q2.
The US’s supportiveness has consisted of Fed official Neel Kashkari advocating a continually cautious attitude with regard to interest rate decisions in the US, while the latest Australian data was yesterday’s Roy Morgan weekly consumer confidence index for May, which remained unchanged at 113.9 points.
Pound Sterling Bolstered Yesterday by Potentially Hollow Trade Balance Results
The Pound has also managed to appreciate against its peers recently, although the proper reaction to the latest piece of UK economic data remains uncertain among investors.
This was the trade balance result for March; between February and March, the UK trade deficit fell, although the bigger picture showed that the deficit over the whole of the first quarter actually expanded to the biggest it has been since 2008.
In response to the larger, more negative result, IHS economist Howard Archer said:
‘The hope has to be that UK exporters will increasingly be helped by the overall marked weakening of the Pound in 2016, although the Pound has climbed off its April lows’.
Recent Sterling movements of note have included advances of 0.2% against the Euro (GBP/EUR) and 0.7% against the New Zealand Dollar (GBP/NZD), although losses of -0.2% against the Mexican Peso (GBP/MXN) and -0.3% against the Australian Dollar (GBP/AUD) have also been seen.
AUD, GBP Exchange Rate Forecast: AU Confidence Stats and Loans Data due This Morning
The next economic announcements set to influence the AUD/GBP exchange rate will come from Australia, in the form of the soon-to-be-released Westpac consumer confidence index for May.
Following on from this an hour later will be the home loans, investment lending and value of loans stats for the same month. In the case of home loans, a dip from 1.5% to -1.5% is expected.
Recent AUD, GBP Exchange Rates
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate has been trending in the region of 0.5099 and the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has been trending in the region of 1.9613 recently.