The Australian dollar has edged higher against the UK currency today even as new data shows the UK economic recovery is firmly on course.
A look at the foreign exchange markets at mid-day in London shows:
The pound sterling to Australian dollar is 0.17 pct in the red at 1.7260. The Australian dollar to pound sterling is thus at 0.5793.
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Sterling pushes for 1.73 once again
Despite the dip through the course of Thursday's session, the pound sterling remains determined to take a shot at the 1.73 level (AUD/GBP @ 05780).
"The pound managed to rise marginally against the Aussie yesterday. The US partial shutdown has reduced demand for higher yielding currencies keeping the Aussie vulnerable. We expect the Aussie to remain on the back foot as UK PMI provides sterling with some momentum and predict it will attempt to close above 1.73," says Sasha Nugent at Caxton FX.
UK Service Sector PMI data gives positive surprise
The UK economy enjoyed its strongest growth for at least 15 years in the third quarter, according to PMI survey data.
Today's service sector PMI came in at 60.3, ahead of expectations for a reading of 60.
That signalled another strong rise in activity on a monthly basis, and extended the current run of continuous growth to nine months.
Nevertheless, currency markets appear to have fully accounted for the current strong economic performance and were unwilling to send the UK currency any higher against the Australian dollar.
Australian dollar still feeling the effects of housing, international trade data hangover
The Australian has meanwhile put in a lacklustre performance across the FX market place as of late with yesterday's data proving problematic for the currency.
Residential building approvals fell more strongly than expected in August, partially unwinding the strong increase in July.
"Despite improved housing market sales, home price growth and low interest rates, trend dwelling approvals growth has been relatively soft in 2013. This suggests a sense of developer and owner-builder caution remains, likely reflecting a softer economic outlook, heightened household debt aversion and ongoing job security concerns," says a note from ANZ Bank.
Meanwhile, Australia’s trade deficit widened to AUD815m in August, a little wider than market expectations.
Historical imports data were revised significantly higher due to the inclusion of new information on low-value imports (mainly for consumption purposes) not previously captured by the statistics bureau.