Australian Dollar Strengthens as Fiscal Cliff Deal Announced (Tom Holian)

Australian Dollar Flat Against the British Pound as Global Markets Recover from Heavy Losses

GBPAUD exchange rates flirted with levels of above 1.56 over the festive period but have since been driven back down to 1.5480 as the Aussie Dollar reacts positively following the announcement of the US Fiscal Deal. Stock indices globally have all risen by about 2% and the FTSE 100 has broken through 6,000 for the first time in 18 months. This has meant that investors have ploughed money into the AUD and the NZD in search of better interest rate yields otherwise known as riskier currencies. Personally it is no surprise that the agreement was reached as the alternative could have meant sending the US into a recession and affecting the global banking system too.

Chinese manufacturing activity has also seen a further appetite for investing in the AUD as Chinese PMI data has come out at 50.6 the same as last month and showing that China is still growing. Anything above 50 indicates expansion so the manufacturing sector seems to be heading in the right way. With global demand having slowed recently this has been one of the reasons for the weakness of the Australian Dollar but this figure has put them back on track  Indeed anything that’s good for the global economy is good for the Australian Dollar.

For further updates as to how the next few data releases might influence GBPAUD exchange rates then feel free to contact me directly Tom Holian teh@currencies.co.uk