The British pound is lower against the Australian dollar on Friday.
- China stimulus- to increase fiscal funds for local governments
- UK reports record monthly GDP contraction
- Equities rebound from post-Fed rout
- Pound-Aussie exchange rate (GBP/AUD) higher by +0.54% this week
GBP/AUD was down by 93 pips (-0.51%) to 1.8287 as of 4pm GMT.
The currency pair trade around 1.84 in early trading but turned lower as the day went on and eventually hit lows close to 1.825. Yesterday it was higher by +0.93%.
GBP: Pounded heads for first weekly gain in six
By late afternoon Friday, the British pound was on course for its first weekly gain over the Australian dollar in six-weeks, having had five-weekly losses on the trot. In what was a turbulent week for global markets, where the Dow fell over 1000 points and oil prices dived over 8% yesterday – the pound has come out on the other side with a win.
Some better news on the Brexit-front, a deteriorating Australia-China relationship and just a very oversold market all helped the pound this week.
Today the news for the UK and Sterling was not so good – in fact some of the worst ever. UK GDP declined by -20.4% according to the Office for National Statistics (ONS)- a bigger drop than the already unprecedented -18.7% projected. That is by far the worst drop ever recorded.
AUD: China stimulus helps retracement of Thursday loss
While relations are clearly souring between Australia China – as demonstrated by the latter warning its students not to study at the former this week – the two economies are still very much intertwined. So an announcement that the Chinese government will release extra funds for local governments to aid employment and consumption was a positive force on the Aussie.
The Aussie dollar dived -2% versus the US dollar on Thursday so some of today’s gains were purely retracing some of that large drop by currency market standards.
US stock markets opened higher on Thursday, though gains looked fragile even after University of Michigan consumer sentiment rose to 78.9- above the 75.0 expected.
