The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate softened as the session progressed as rising gold prices offered support to the ‘Aussie’.
Gold prices rose above $1,300 an ounce on Thursday, shaking off earlier losses, after European Central Bank President Mario Draghi surprised investors by announcing a bigger-than-expected bond-buying program.
Earlier the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate surged to its strongest level in 2-weeks on Wednesday and looks set to make further gains as a surprise decision by the Bank of Canada (BOC) to slash interest rates increased speculation that the Australian Central Bank will soon follow suit.
AUD/USD Exchange Forecast to fall below 80 cents
The Australian Dollar weakened against the majority of its peers after the Bank of Canada stunned the financial markets by slashing interest rates by 25 basis points. Canadian interest rates were cut from 1% to 0.75%.
The move caused economist to speculate that due to the weakening Australian economy the Reserve Bank will soon follow suit and cut Australian interest rates.
Also set to weaken the ‘Aussie’ further are expectations that the European Central Bank will introduce a quantitative easing programme that will be far larger than anyone had previously predicted.
‘A couple of surprises were responsible for sharp fall in the Australian Dollar and the New Zealand Dollar. First, a Bloomberg story citing unnamed ECB officials said the ECB would announce a quantitative easing programme much bigger than the market expected €50 billion per month until December 2016. Then, Canada’s central bank surprised with an interest rate cut citing lower oil prices,’ said Imre Speizer, senior market strategist from Westpac.
Pound Sterling to Australian Dollar Exchange Rate Forecast
The Pound is likely to take advantage of the ECB announcement and move higher against the ‘Aussie’. The UK currency could also receive support from upcoming UK public sector borrowing, and CBI data. Economists are forecasting that public sector borrowing eased from Novembers figure of £-13.41 billion to £-9.05 billion.
The CBI business optimism index meanwhile is expected to show that confidence is improving and rise from the previous reading of 8.0 to 12.98.
GBP/AUD Exchange Rate
The Pound Sterling to Australian Dollar exchange rate hit a session high of 1.8798
The Pound Sterling to Australian Dollar exchange rate hit a session low of 1.8678
The Pound Sterling to Australian Dollar exchange rate is trading in the region of 1.8711
