Pound strengthens on trade balance figs

The pound gained substantial ground against the Australian dollar yesterday, before giving back some of its gains overnight.

• Following the release of worse-than-expected Australian trade balance figures, the pound made strong gains against the aussie yesterday, rising by almost 3 cents and investors sold the Australian currency.
  
• However, the Australian dollar began recovering some of this lost ground overnight, as robust domestic data helped offset the Trade Balance figures.
  
• Private sector data overnight showed Australian vehicle sales surged to their third highest ever in June, while services sector activity boasted the first expansion in 15 months.
  
• These figures emphasised Australia's economic and financial health relative to other countries.