The GBPAUD exchange rate has hit above 1.53 this afternoon following news that July’s building approvals dropped more than was first estimated. With the Jackson Hole symposium due tomorrow with Ben Bernanke talking about US economic policy it is unlikely after an improvement is US data that further stimulus will be needed. This has seen a small sell off from high yielding currencies including the AUD, NZD & ZAR. Also, Chinese PMI data due out on September 1st could see a small drop signalling a lack of growth and confidence in the world’s second largest economy. With Australia heavily reliant on China if we see negative figures over the next few days we could see a further weakening of the Australian Dollar.
In Australia, the number of building permits granted has also fallen 17.3% in July compared to the previous month and this was three times more than the estimate of 5% by 18 economists from Bloomberg. Yesterday’s US Beige Book showed that the world’s largest economy continued to improve gradually and this means it is less likely that the Fed will go down the route of monetary easing which means we could see an improvement for the rate to buy Australian Dollars.
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