Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Jumps 1.5%
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate surged to fresh multi-year highs during the Australasian session as the Reserve Bank of Australia (RBA) unexpectedly cut interest rates to a new record low of 2.25%.
The central bank cited an overvalued domestic currency as one of the driving forces behind the decision.
The Australian Dollar plummeted against the majority of its peers after the announcement and held declines into European trading.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trading in the region of 1.9592
Earlier…
GBP/AUD Exchange Rate Trends Lower before RBA
After initially surging on the back of a disappointing Chinese manufacturing report, the Pound Sterling to Australian Dollar (GBP/AUD) currency pair lost 0.5% to trade in the region of 1.9297.
The Australian Dollar steadied against a number of its peers ahead of the highly-anticipated Reserve Bank of Australia (RBA) interest rate decision.
Should the RBA opt to cut interest rates later this week, the Pound could touch fresh highs against its South Pacific peer.
Earlier…
GBP/AUD Exchange Rate Jumps after Chinese Manufacturing Data
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate advanced over the weekend as China’s Manufacturing PMI fell flat, adding to calls for the People’s Bank of China (PBOC) to introduce additional stimulus measures.
China’s manufacturing PMI dipped to 49.8 in January. This is the first time the measure has eased below the 50 mark separating growth from contraction for 2 1/2 years.
ANZ economists noted; ‘China still needs decent growth to add 100 million new jobs this year, plus China is entering a rapid disinflation process. We (think) the People’s Bank of China will cut the reserve requirement ratio by 50 basis points and cut the deposit rate by 25 basis points in the first quarter.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trading in the region of 1.9476
Earlier…
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate could achieve fresh highs if the Reserve Bank of Australia (RBA) cuts interest rates next week.
GBP/AUD Exchange Rate Dips before Expected Interest Rate Revision
Although the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate extended its recent, sizable gain during the Australasian session as a result of rising RBA rate cut expectations, the GBP/AUD currency pair went on to shed over 0.3% ahead of the close of Friday’s European trading.
Demand for the Pound was tempered by a mixed bag of UK data and bets that next week’s British reports could support the case for the Bank of England (BOE) leaving interest rates on hold.
However, the Australian Dollar continued trending below 78 cents against the US Dollar before the weekend.
According to one foreign exchange dealer; ‘Iron ore and commodity prices have also been falling off again, which has a big impact on the Aussie Dollar. I don’t think the RBA will act as quickly as speculated on interest rates because the Aussie is doing what they want, but the market sentiment appears to be in favour of an interest rate cut and as rumours go around, people start selling off.’
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
Should the RBA trim borrowing costs on Tuesday, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate could attain fresh highs.
The Bank of Canada’s (BOC) recent rate cut and dovish comments from the Reserve Bank of New Zealand (RBNZ) have supported the case in favour of an RBA rate revision.
However, if the RBA opts to leave interest rates on hold for now, and doesn’t imply that negative revisions are on the cards for March, the ‘Aussie’ could rebound against peers like the Pound and US Dollar.
In the view of industry expert Richard Grace; ‘I think we could see a rise of half to three-quarters of a cent for the Australian Dollar, but I think the Australian Dollar would probably come under further downward pressure as the lower commodity prices and the stronger US Dollar reassert themselves.’
Other factors which could influence the direction taken by the GBP/AUD currency pair at the beginning of next week include the AiG Performance of Manufacturing report, China’s HSBC Manufacturing PMI, the UK’s Markit Manufacturing PMI and Australia’s trade balance figures.
As the week progresses, the UK’s Construction/Services reports will also have an impact on Pound Sterling to Australian Dollar trading.
If the gauge measuring the performance of Britain’s dominant sector (services) declines, Sterling could slip.
At the close of the week, the Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.7770
The Australian Dollar to Euro (AUD/EUR) exchange rate was trending in the region of 0.6885
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 1.9322
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.5173
