UPDATE
The British Pound is generally holding steady versus the majority of its most traded currency rivals in the early stages of Tuesday’s European session. British inflation data is due for publication later on Tuesday morning and is likely to provoke Sterling volatility, especially given that Bank of England (BoE) officials have already expressed concerns regarding the lack of inflationary pressure. However, August’s Consumer Price Index is predicted to drop from 0.1% to 0.0%.
After China’s equity market ended the session 3.5% down, the Australian Dollar slumped versus most of its major peers. Additional ‘Aussie’ (AUD) losses can be attributed to dovish Reserve Bank of Australia minutes that warned about downside risks in the face of weak commodity prices.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.1672.
Yesterday…
UK Pound (GBP) Conversion Rate Predicted to Soften against the ‘Aussie’ (AUD) on British Political Uncertainty
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate softened by around -0.6% on Monday afternoon.
The British Pound fluctuated versus its major peers during Monday’s European session amid political uncertainty. After the Labour Party Leader election saw Jeremy Corbyn win the votes, the Pound dived versus its peers. As Corbyn is a renowned Euro-sceptic, this has caused many to fear that the Labour Party will campaign for an exit from the European Union in the 2017 referendum.
As Monday’s European session progressed, however, the Pound advanced versus may of its competitors amid concern that the depreciation was overdone. Further aiding the Sterling uptrend was a speech from Labour’s new foreign affairs spokesman Hilary Benn. Benn stated that the Labour Party will be campaigning for the UK to remain a member of the EU no matter what the circumstances. This hasn’t completely eradicated concerns regarding a Brexit, however, which is evidenced by the Pound’s return to depreciation. The UK asset is currently edging lower versus many of its peers with a complete absence of domestic data to provoke changes.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.1596.
‘Aussie’ (AUD) Exchange Rate Forecast to Trend Higher against the UK Pound (GBP) On Pessimistic Fed rate Hike Bets
Despite the fact that China’s economic woes are having a significantly detrimental impact on Australia; the ‘Aussie’ advanced versus many of its currency rivals during Monday’s European session. Even less-than-ideal results from domestic data publications weren’t enough to offset the Australian Dollar uptrend.
The ‘Aussie’ appreciation can be linked to speculation that the fall in China’s equity market and slowing economy will cause the Federal Open Market Committee (FOMC) to delay a rate hike. The odds of the Federal Reserve increasing the benchmark interest rate on Thursday currently stand at 30% as Gross Domestic Product was positively revised and Unemployment continues to decline. However, the situation in China has caused many to fear that the FOMC will shy away from rate hikes in the current climate of uncertainty.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 2.1515 during Monday’s European session.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Hold Losses ahead of RBA Minutes
With no further domestic data publications due, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold losses for the remainder of Monday’s European session. Looking ahead, however, there will be several influential domestic data reports with the potential to provoke GBP/AUD volatility on Tuesday. For those trading with the ‘Aussie’, the Reserve Bank of Australia (RBA) minutes from the most recent policy meeting will be of significance. For those invested in the British Pound, August’s Consumer Price Index will provoke changes. UK inflation data is of particular importance given that Bank of England (BoE) policymakers have previously stated that the lack of inflationary pressure is preventing a benchmark interest rate hike.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate climbed to a high of 2.1871 during Monday’s European session.
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