John from Moneycorp

Australian dollar update - 30/07/2012

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    The Australian dollar continued its advance against sterling which has been going on for more than two months and cost the pound 12 cents or 7% of its value. The pound is within four cents of the all-time low it achieved in February.

     

    Sterling would have done even worse last week had it not been for the European Central Bank pledging to "do whatever it takes to preserve the euro". Where investor nervousness about Euroland had earlier dragged the pound lower, newfound enthusiasm for the euro after the ECB comment pulled it higher.

     

    Two of the events most likely to affect GBP/AUD this week have nothing to do with either country; the ECB's policy announcement on Thursday and US payrolls on Friday. The Bank of England's policy announcement also comes on Thursday but there is only an outside chance of a rate cut.

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    Contrasting data from Australia and the UK has kept the Australian dollar very strong against the pound.

    UK – yesterday, a PMI survey, showed Britain's manufacturing sector shrank at its fastest rate in more than three years in July.

    Australia – reported an improvement in retail sales and trade data.

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    Guest Chris_J

    I've been watching the rates for a while now, and wish I'd moved some money a couple of months ago when the rate was 1.6. It looks like there is no sign of the £ strengthening against the Dollar any time soon.

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    The Aussie dollar is slightly weaker today due to some weak Chinese data released (disappointing trade numbers in China).

     

    China is Australia’s largest trade partner therefore any news from the region can affect the dollar.

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