The Pound Australian Dollar exchange rate is 0.475% higher with 1 GBP = 1.5576 AUD.
"The British Pound continued to trade higher for a second day against the Euro this morning, touching a high of 1.1797 in London, but the UK currency was unable to maintain gain above 1.56 versus the US Dollar," says Adam Solomon an exchange rate analyst with Tor Fx.
Despite the surprisingly positive reports on UK manufacturing and mortgage approvals yesterday, the underlying concern surrounding the economy and the drop in retail sales remains the prevailing factor that will likely weaken the Pound.
The British Pound has traded at the lowest level on record versus the Australian Dollar and lost ground versus all of the 16 most actively traded currencies over the past month, amid speculation that the VAT hike and public sector job cuts will curtail the pace of spending, slow the economy and provoke a second recession.
That will inevitably lead to more quantitative easing from the Bank of England from the current £200 billion. Nevertheless, amongst the pessimism the Pound is benefiting from the better-than-expected data yesterday and ongoing concerns surrounding Euro-zone sovereign debt could see the Pound breach 1.18 versus the Euro.
The single currency has also sank back towards 1.31 versus the US Dollar, despite data this morning that showed European services and manufacturing sector grew by more than expected in December.
