The Australian Dollar Pound (AUD GBP) exchange rate held close to a two-week low on Thursday as investors flocked from the ‘Aussie’ to the US Dollar (USD).
Australian Dollar (AUD) Slips as US Dollar (USD) Demand Surges
The Australian Dollar registered significant losses early on Thursday as a jump in demand for the US Dollar caused investors the ditch the riskier ‘Aussie’.
The ‘Greenback’s sudden resurgence was largely prompted by the release of upbeat US economic data as the latest US GDP estimate saw second quarter growth revised up from 2.7% to 3.0% .
On top of this the latest ADP employment data reported that 237,000 American found work in the US private sector in August, up from 201,000 the previous month and outpacing expectations of a rise of 183,000.
The jump in employment lead to increased optimism that Friday’s non-farm payrolls data will also impress USD investors.
The upbeat US data meant that the Australian Dollar was also unable to advance despite an unexpected uptick in China’s latest Manufacturing PMI, with the continued growth in China’s factory usually bolstering the ‘Aussie’ on hopes that it will increase demand for Australian commodity exports.
Pound (GBP) Strengthened By Unexpected Rise in Consumer Confidence
Meanwhile the Pound found some strength yesterday with the release of the UK’s latest Consumer Confidence figures as investors were surprised to see that sentiment actually rose in August.
Economists had previously forecast that the UK’s confidence index was likely to slip from -12 to -13 last month as household finances continued to come under pressure from a fall in real wages, however an unexpected jump to -10 was a pleasant surprise for many GBP investors.
Analysts warned about reading too much into the figures however with Joe Staton, head of market dynamics at GfK said;
‘The index has a lot of ground to regain to get back to black, so is this month’s rise significant? Or could we simply be witnessing a dead cat bounce over the dog days of summer?’
AUD GBP Forecast: Manufacturing Data Ahead
Looking ahead the AUD GBP exchange rate may slip at the start of the Asian session on Friday as Australia publishes its latest manufacturing index, with analysts predicting that domestic activity in the factory sector will have slipped in August.
Meanwhile the Pound may have an equally downbeat session as the UK releases its own manufacturing PMI, with a potential slip in August likely to further undermine confidence in Britain’s economy.
Current Exchange Rates
At the time of writing the AUD GBP exchange rate was trending around 0.6130 and the GBP AUD exchange rate was trending around 1.6304