A survey produced by HSBC this morning has indicated that growth in China’s manufacturing sector has slowed down in April. The initial reading for Chinese PMI fell from March’s data of 51.6 to 50.5. Anything above 50 represents expansion so yes they are still growing but clearly there is a slowdown. During 2012 Chinese GDP grew at the slowest pace in 13 years. Growth in the country has also dropped to 7.7% in quarter 1 compared to 7.9% during the final quarter of 2012.
Generally speaking the Australian Dollar is heavily influenced by what is happening in China. With the recent poor performance by the world’s second largest economy we have seen GBPAUD exchange rates break through 1.49 this week, the first time since February. With UK GDP data due to be published on Thursday if we see negative growth this could push the UK into recession which arguably could push Sterling down but my feeling is that this is already priced in so unlikely to have the expected movement on the Pound. Indeed, I think we could see a further strengthening for the Pound if the data is better than expected.
UK Borrowing was £120.6bn in the last 12 months slightly lower than the the previous year of £120.9bn with the UK government planning to reduce this as much as possible with a view to eliminating the budget deficit by 2018. However, Public Sector Net Borrowing now stands at approx £1.2trn which is over 75% of GDP according to the Office for National Statistics.
If you need to buy or sell Australian Dollars and want to make sure you are getting commercial exchange rates we aim to better the rates offered by your bank. For a free quote send me an email with a brief description of your enquiry with ‘FREE QUOTE’ in the subject of the email. Tom Holian [email protected]