After advancing considerably on Thursday in the aftermath of hawkish comments from Bank of England policymaker Martin Weale, the Pound is holding against high-yielding assets with an absence of domestic data to provoke volatility. However, a dovish speech from BoE Chief Economist Andy Haldane has caused Sterling to slump against safe-haven currencies. Meanwhile, the Australian Dollar and New Zealand Dollar have firmed up a little on Friday as the commodities market shows signs of rebounding from a long period of declination.
The Pound Sterling to Australian Dollar exchange rate is currently trending in the region of 1.8304.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0202.
With a complete lack of economic data to curb the trend, the Pound advanced against nearly all of its most traded currency competitors on Thursday. The upsurge was initiated by comments made by Bank of England policymaker Martin Weale, who suggested that the improvement in unemployment should be met with a benchmark rate hike. He argued that rather than waiting for wages to increase and allowing inflationary pressures to build, the BoE should increase rates in anticipation rather than as a reaction.
Both the Australian Dollar and the New Zealand Dollar have struggled against a sustained period of cautious trading. With geopolitical tension mounting regarding the Ebola virus, increased fears over the slow pace of global economic recovery, a struggling European economy and a bearish commodities market; it is unsurprising that the risk-correlated South Pacific assets have plunged versus all of their major counterparts.
The Pound Sterling to Australian Dollar exchange rate has plunged to a low today of 1.8279.
The Pound Sterling to New Zealand Dollar exchange rate has fallen to a low today of 2.0104.
On Friday an absence of British economic data has seen the Pound holding against risk-correlated currencies. However, Sterling softened against many of its rivals after Bank of England Chief Economist Andy Haldane more or less contradicted fellow policy maker Mr. Weale. Haldane stated that he was forced to reassess his position on rate hikes after evidence of weak global economic growth, low inflationary pressures from commodities and low wage growth.
‘Recent evidence, in the UK and globally, has shifted my probability distribution towards the lower tail. Put in rather plainer English, I am gloomier,’ he said. ‘That reflects the markdown in global growth, heightened geopolitical and financial risks and the weak pipeline of inflationary pressures from wages internally and commodity prices externally.’
Both South Pacific currencies, meanwhile, have avoided further declination on Friday after the commodities market improved following a rebound in oil prices. Ben Sharples, writing for Bloomberg, stated; ‘Oil is paring its collapse as banks including BNP Paribas SA and Bank of America Corp. predict the rout may be over. They’re counting on OPEC reducing output as the U.S. pumps the most oil in almost 30 years and world demand growth slows. Saudi Arabia and Kuwait indicated the price fall doesn’t warrant immediate production cuts, bolstering concern the drop may have further to run.’
An advance in gold and corn has also aided a commodities market recovery.
Forecast for the Pound to Australian Dollar and New Zealand Dollar
Although the commodities market seems to be on a slow road to recovery, it is unlikely that it will be enough to spark a renewed vigour in the ‘Aussie’ (AUD) and ‘Kiwi’ (NZD). As trader anxieties continue to mount regarding geopolitical developments and global economic recovery, cautious trading will continue to dictate markets.
Sterling is most likely to soften in reaction to the comments made by the BoE’s Chief Economist on Friday.
The Pound Sterling to Australian Dollar exchange rate has advanced to a high today of 1.8398.
The Pound Sterling to New Zealand Dollar exchange rate has climbed to a high today of 2.0344.
Pound Sterling (GBP) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Pound,
,US Dollar,1.6066,
Pound,,Euro,1.2554,
Pound,,New Zealand Dollar,2.0239,
Pound,,Australian Dollar,1.8323,
US Dollar,,Pound,0.6221,
New Zealand Dollar,,Pound,0.4940,
Euro,,Pound,0.7962,
Australian Dollar,,Pound,0.5455,
[/table]
