Pound DROPS from two-month high against Australian dollar and seven-month high vs NZD
THE pound has weakened against the Australian dollar and New Zealand dollar after the early morning’s data calendar provided strong support for the antipodean currencies.
The pound has drop from a two-month high against the Australian dollar
GBP/AUD has slumped -0.6 per cent to trade at 1.655, while GBP/NZD has slipped below opening levels to 1.792.
Chinese trade data is supporting both currencies after March figures showed imports increased by 20.3 per cent.
Economists had predicted a slowdown to 15.5 per cent from February’s 38.1 per cent growth.
Fears that rising stockpiles of raw materials and a glut of steel would curb imports of iron ore and copper were quashed after volumes were seen to have lifted significantly.
Overall, imports climbed 24 per cent year-on-year during the first quarter of 2017.
Concerns over the economic health of the Asian superpower - a key export market for both Australia and New Zealand - have waned after the latest figures, which also showed that export growth accelerated to a two-year high last month.
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Data closer to home has also provided support to the Australian and New Zealand dollars.
Rates of part-time employment continued to drop
The latest Australian unemployment figures smashed forecasts to show over 60,000 new people entered work in March - threefold above economists’ expectations.
An unexpected rise in the participation rate to 64.8 per cent - showing that more people out of work were actively seeking employment - had the effect of keeping the unemployment rate at 5.9% despite the surge in the newly-employed.
The New Zealand and Australian dollars were boosted by Chinese import data
Rates of part-time employment continued to drop, falling by -13,600 in March while February’s decline was revised higher to -35,900.
This saw the number of full-time workers rise 74,500 last month and an upwardly-revised 38,800 during February.
The pound has now lost most of this week’s gains against the Australian dollar, although GBP/AUD remains around its highest levels since February 1st.
GBP/NZD has also eased back, this time from a seven-month high.
The latest Business NZ performance of manufacturing index for March has climbed from an upwardly-revised 55.7 to 57.8, while the marked decline in house sales slowed last month from -14.2 per cent to -10.7 per cent.
Despite weakness versus the antipodean currencies, the pound is largely advancing elsewhere, although domestic data is lacking.
Chinese trade is boosting both currencies as importants jump by 20.3 per cent
The Royal Institution of Chartered Surveyors (RICS) house price balance remains firmly at 22 per cent and the only development left on the UK’s economic calendar is the Bank of England’s (BoE) Credit Conditions & Bank Liabilities Survey results.
There is no Australian or New Zealand data left for release today, but the current strength of the commodity currencies could be heightened further by the US University of Michigan confidence survey for April, which is predicted to edge back slightly.