The Australian Dollar has continued its recent strengthening this week following some surprisingly poor manufacturing data released in the UK. Activity in the sector shrank in February to 47.9 from January’s figure of 50.5. Anything below 50 represents contraction and so the current weakening of the Pound could continue in order to drive the UK’s economy with an export led recovery. The results were a big surprise this morning and Sterling has fallen by over 0.6% this morning against the Aussie Dollar or a difference of £400 per AUD$100,000 converted.
The data has been seen as a massive setback to the recovery of the UK and points us in the direction of a triple dip recession. If the current quarter is negative which we’ll find out after March the rates for Sterling could fall a lot further than even where they are at the moment. With an uncertain British economy this means that Sterling is testing lows against the Australian Dollar. Indeed, manufacturing in the UK accounts to over 10% of the overall economy so these figures are not pleasant reading.
Over in America revised GDP figures were published for Q4 2012. The data showed that the economy has actually grown by 0.1% compared to the previous contraction of -0.1%. With the American economy stabilising this means that investors are attracted to riskier currencies including the Australian Dollar which is another reason why the currency has strengthened this week.
To ensure you’re getting competitive rates of exchange when transferring currency feel free to contact me directly Tom Holian [email protected]