The Pound Australian dollar exchange rate is 0.438% lower with 1 GBP = 1.5728 AUD. The Pound New Zealand dollar exchange rate is 0.612% lower with 1 GBP = 1.9681 NZD. "Bad domestic news failed to weaken the Australian dollar, which was helped by some encouraging news from China," says a note from Richard Driver at Caxton Fx, the exchange rate and money transfer company. Overnight Australian data was poor; the unemployment rate rose by 0.2% to 5.1% and inflation expectations eased considerably (easing any pressure on the RBA to control price pressures by hiking interest rates). Poor Aussie data will be adding to bets that the RBA will have to cut interest rates in coming months. News that China is allowing its currency to appreciate weakened the US dollar and benefited the aussie dollar, helping it to trade flat against the pound in a distinctly risk-off session. "The Australian dollar may struggle to guard against a pull back today however, but at present it all depends on events in the stock market," says Driver. New Zealand dollar The New Zealand dollar was more affected than its Australian counterpart by the sell-off in risk yesterday afternoon. Trading remains incredibly volatile, not least in riskier currencies such as the kiwi dollar. GBP NZD is not far off six-week highs; recent improvements in the kiwi economy are irrelevant at present and it is totally in the hands of wider global concerns at present. Longer-term though, the kiwi will be well-placed to rebound if and when confidence rebounds. "Sterling is trading at 1.97 against the kiwi dollar and assuming the equity markets struggle again today, sterling has some further upside potential," says Driver.

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