The Pound Sterling (GBP) has worsened in its struggle against the Australian Dollar (GBP/AUD) today, slipping a further point to -1.3%. A potential reason for this continued deterioration may be that investors are looking ahead to tomorrow’s mixed-forecast CPIs for the UK.
UK and US Inflation Results Out Tomorrow, Potential for GBP/AUD Uptrend
The Pound Sterling (GBP) is likely to be moved tomorrow morning by the release of the November CPI results, which have mixed predictions assigned to them. More concretely, the afternoon’s US CPI printings are currently forecasted positively and therefore might cause the ‘Aussie’ (AUD) to devalue against the Pound (GBP/AUD) should they match with forecasts.
Earlier…
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has fallen considerably today, mainly on account of a combination of negative UK domestic factors and supportive Australia-related events.
GBP/AUD Exchange Rate News: BoE Official Issues Dovish Statement and Secures Sterling’s Downfall
The Pound Sterling (GBP) has fared poorly today, dropping by -1.2% against the Australian Dollar (GBP/AUD) and seeing a number of notable losses elsewhere. Among these have been -0.9% against the Hungarian Forint (GBP/HUF), -1.1% against the New Zealand Dollar (GBP/NZD) and -4.7% against the South African Rand (GBP/ZAR). On the other side of the coin, a rise of 0.7% against the Russian Ruble (GBP/RUB) has been recorded. This massive loss against the Australian Dollar likely feels like a bad case of deja vu for Sterling investors since last week’s downtrend.
The Pound’s biggest detractor in value today has been a statement from Bank of England (BoE) Deputy Governor Minouche Shafik, who has admitted that: ‘I judge it prudent to tread carefully and refrain from voting for an increase in [the] bank rate until I am convinced that wage growth will be sustained at a level consistent with inflation returning to target’.
Australian Dollar (AUD) Rallies Today after PBoC Loosen Currency Pegging
The Australian Dollar (AUD) has excelled in performance today, rising across the board against its major peers. Gains have included 0.5% against the Chinese Yuan (AUD/CNY), 0.6% against the US Dollar (AUD/USD) and 1.1% against the Pound Sterling (AUD/GBP).
The primary cause for this highly positive performance has been the fact that the People’s Bank of China (PBoC) have signified their intent to possibly ‘loosen’ the current pegging of the Chinese Yuan (CNY) to the US Dollar (USD). As a consequence, the PBoC would then be open to buying other currencies, such as the Australian and New Zealand Dollars (NZD), in greater volumes to keep the Yuan in the right range.
GBP/AUD Exchange Rate Forecast: RBA Minutes due Tomorrow ahead of UK Inflation Rate Data
The next releases that are likely to cause noticeable movement in the GBP/AUD pairing will come first from the Australian side, with the Q3 annual House Price Index and the Reserve Bank of Australia (RBA) December Meeting Minutes out early next morning. As of writing, forecasts have been for a rise from 9.8% to 10.2% for the former field, which may just prolong the current ‘Aussie’ uptrend against the Pound.
Further ahead, the UK will have input in the form of the Consumer Price Indices for November which are expected to rise on the year for both the base and Core figure, but decline to -0.1% on the base monthly result.
Current GBP, AUD Exchange Rates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.0926 and the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.4781 today.
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