Both China and Hong Kong’s stock indices dropped yesterday which directly impacted on the Australian stock market. Although the index still remained above 4,300 confidence in the Australian economy seems to be waning. Sterling vs Australian Dollar exchange rate continues to improve and mid-market levels this morning shows a recent high at 1.5384. The stocks most affected across the board include the mining companies. Leighton, one of Australia’s largest construction companies dropped by over 6% after the firm cut its profit forecast by almost 40% owing to problems with its large scale projects.
With Q4 UK GDP slightly lower than expected at -0.3% this would typically have a negative impact on GBPAUD but with the exchange rate for those buying Australian Dollars moving in the right direction it goes to show how problems down under are affecting the AUD$.