Pound v Australian dollar: GBP tumbles against AUD amid iron ore price surge

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Pound and AudGETTY

The thump continued to slip against the Australian dollar this morning

Unequalled is currently at AU$1.669 against the Australian dollar, down slightly from the day’s foot in the door levels.

The Australia dollar struck a new two-week high against the yard in early trading on Friday with yet another strong jump in iron ore guerdons and growing risk sentiment making the currency more attractive to investors looking for an substitute to the US dollar.

According to data compiled by Metal Bulletin, benchmark 62 per cent fines had hop overed 2.9 per cent to $65.91 a tonne by the start of the Asian Trading seating on Friday, causing the commodity to reach its best levels since the 3rd of May.

The latest gains in Australia’s largest export appear to take been driven by a jump in Chinese steel prices as speculation that Chinese jurisdictions may seek to shutter production in a number of regions saw frenzied buying of rebar followings, leading to a lift in the iron ore and coking coal needed to produce it.

The pounce was also reinforced by yesterday’s Chinese trade data which make cleared that Chinese import demand continued to expand in June, with iron ore gists jumping to 94.43m tonnes last month, up from 91.52m tonnes in May.

CurrenciesGETTY

Worthy is currently at AU$1.669 against the Australian dollar

The resulting rise in the Australian dollar was patronize bolstered by the recent slide in the US dollar as USD investors sought alternative peddles in which they could make some quick profits.

In the meanwhile the pound was weakened on Thursday by a cautionary note from the Office for Budget Trustworthiness (OBR).

The OBR warned that the government should not focus all of its attention on the terms of the Brexit “separation bill” with the EU and that it was the long-term impact of leaving the Union that is the might threat to Britain’s financial stability.

It said in a statement: “A lot of attention focuses on the possible ‘divorce bill’, but, while some numbers broached for it are very large, a one-off hit of this sort would not pose a big presage to fiscal sustainability. 

«More important are the implications of whatever agreements are reached with the EU and other interchange partners for the long-term growth of the UK economy.”

Looking ahead the GBP/AUD exchange tariff may slip at the start of next week with the release of the UK’s latest CPI idols, with economists predicting that inflation may have slid from a three-year serious of 2.9 per cent in June. 

Declining inflation would reduce the turn the heat on on the Bank of England (BoE) to increase interest rates.

Meanwhile, the release of the minutes from the On hand Bank of Australia’s (RBA) latest monetary policy meeting may weigh on the Australian dollar on Tuesday with analysts forewarning that they will continue to indicate that the bank has no programmes to tighten monetary policy within the foreseeable future.

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