The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate remained under pressure on Monday as positive data out of China lent support to the ‘Aussie’ and as the UK currency remained under pressure from last week’s soft data releases.
Chinese data supported the Australian Dollar and allowed the currency to hold onto gains against a number of peers including the Euro and US Dollar. As China is Australia’s biggest trading partner, any positive data out it gives the ‘Aussie’ support.
Data released over the weekend showed that China recorded a bigger than forecast trade surplus in October, easing some of the concerns over a slowdown in the world’s second largest economy.
The trade surplus increased from $31.0 billion to $45.41 billion, exceeding market expectations for a $42.3 billion surplus. On an annual basis, the surplus was 46.3% larger than the one seen in the same month of last year.
‘The trade surplus was driven by the contraction in growth of imports…and export growth was not very strong. Therefore, the quality of the surplus was not very high. Domestic demand is weak. De-stocking this year has led to consumption of cement, coal, iron ore and other raw materials to decline, making demand for imports weak,’ said Liou Xuezhi, an analyst from the Shanghai based Bank of Communications.
Also supporting the strength of the Australian Dollar is the softness of the US Dollar. Last week’s softer than forecast US Nonfarm Payrolls data caused investors to embark on a bout of profit taking which in turn softened the ‘Greenback’ and allowed the ‘Aussie’ to rise.
‘Friday’s disappointing US jobs report sent the US Dollar reeling and lifted the Aussie back towards the 86.60 barrier. Several strong sessions for the ‘Greenback’ during the week likely left it sensitive to profit taking on a miss from the headline jobs added print,’ said market analyst David de Ferranti.
The GBP/ AUD exchange rate is likely to see little movement throughout the rest of the session due to a lack of market moving data releases.
GBP/AUD Exchange Rate Forecast to Advance
The Pound is slowly but surely regaining ground against the Australian Dollar and is forecast to make gains by midweek as economists increased their expectations that the latest UK employment and wage growth data will both show improvement. The overall unemployment rate is expected to fall below 6% to 5.9%.
The Bank of England will also deliver its latest inflation report which too is forecast to show signs of improvement.
The Australian Dollar could make gains prior to the UK data releases as the latest Westpac confidence data is published on Tuesday night. The index is forecast to rise from 94.8 to 94.9.
GBP/AUD Exchange Rate Forecast to make more gains
The Pound to Australian Dollar exchange rate rallied on Tuesday as the Australian Dollar was weakened by a resurgent US Dollar and a disappointing confidence report. The National Australia Bank said its business confidence index ticked down to 4 in October from a reading of 5 the previous month.
The Pound meanwhile made gains after data released by the British Retail Consortium showed that retail sales in October increased by 1.4% in October as UK consumers spent more on Halloween costumes and other related items.
The AUD/GBP exchange rate could see movement in the Asian session as the latest Australian Westpac confidence data is released. A positive result could see the AUD regain some losses.
GBP/AUD Exchange Rate Eases in Quiet Trade
The Pound gave up earlier gains against the Australian Dollar as investors eased off of the UK currency ahead of Wednesday’s Bank of England Inflation report and UK employment data.
Trade has been muted throughout the session due to a lack of economic data releases from any of the major economy zones.
Support for the ‘Aussie’ inched higher ahead of the evenings Westpac confidence data and domestic wage growth data releases.
GBP/AUD Exchange Rate Firmer Ahead of Data Releases
The ‘Aussie’ exchange rate firmed against the Pound Sterling after it found support from the release of positive consumer sentiment and wage growth data. The Westpac Banking Corporation said Australia’s consumer sentiment rose 1.9% in November, after a 0.9% increase the previous month.
A separate report showed that Australian wage prices increased by 0.6% in the third quarter, in line with expectations and unchanged from the previous quarter. The GBP/AUD exchange rate is likely to experience movement when the Bank of England releases its Inflation report and the latest employment and wage growth data is published. Both reports are forecast to show improvement.
GBP/AUD Exchange Rate Declines on Bank of England Report
The Pound dropped beyond a weekly low against the Australian Dollar on Wednesday after the Bank of England cut its growth forecasts and said that interest rates are unlikely to rise until late next year. The report also said that the UK’s inflation rate could dip below the 1% level as soon as the first quarter of next year. The report knocked sentiment towards the Pound and sent the currency falling following earlier gains.The BoE warned that the waning Eurozone was continuing to weigh upon the UK economy.
Early in the session the GBP exchange rate advanced against many of its most traded peers after data showed that UK wage growth increased more than inflation for the first time in five years.
The Australian Dollar meanwhile received support an improved consumer sentiment report.
The GBP/AUD continued to decline to trade in the region of 1.8024 on Thursday.
Australian Dollar (AUD) Exchange Rates – November 13
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.8739 ,
Australian Dollar,,Pound Sterling,0.5551,
Australian Dollar,,Euro,0.7001 ,
Australian Dollar,,New Zealand Dollar,1.1050 ,
US Dollar,, Australian Dollar ,1.1443 ,
Pound Sterling,, Australian Dollar ,1.8012 ,
Euro,, Australian Dollar ,1.4282 ,
New Zealand Dollar,, Australian Dollar ,0.9050 ,
[/table]
