The pound to Australian dollar exchange rate fell yesterday after much weaker UK Purchasing Managers Index (PMI) data that was released. Rates for GBP vs AUD currently sit at 1.9380 for the pair. UK PMI data for the manufacturing sector dropped to 32.9 or April which was down from 47.8 the previous month.
UK Services Sector Data Record Dramatic Fall Causing GBPAUD Volatility
The services sector fell to a staggeringly low 12.3 from 34.5 the month prior. The figure is an all-time low since records began 20 years ago and highlights just how badly the sector has been hit by Covid-19. The impact on sterling was limited and the pound appears to have found some support as the price of oil has recovered in value and a perceived improvement in risk appetite. The Australian dollar generally performs better when the global economic outlook is improving and this may be why the Australian dollar has found some support as governments try to get to grips with Covid-19 pandemic.
Bank of England Policymaker Gertjan Vlieghe Issues Stark Warning on UK Economic Outlook
A GfK survey in the UK has also reported a steep drop in consumer confidence which ties in with comments from Bank of England policymaker Gertjan Vlieghe who said that Britain was likely to see the worst fall in output for potentially hundreds of years. The GfK confidence data is close to the lows that were seen around the time of the financial crisis of 2008. Those looking to buy or sell Australian dollars would be wise to consider making contact to discuss options and whether to take the uncertainty out of the volatile currency markets.
Australian inflation data is released next week although will likely be overshadowed by al the latest Coronavirus developments. UK data is light next week although mortgage approval released next Friday could be an interesting one to watch in terms of the health of the UK housing market. Any wobble in house prices could create further problems for the British economy. Brexit is also likely to gather more discussion as those trade negotiations must move forward whilst Britain is in the transition period which end at the end of 2020.
If you’d like to discuss these factors and how they could impact an upcoming currency transfer, feel free to get in touch with me, James Lovick, using the form below.