The Pound Australian Dollar (GBP AUD) exchange rate began to claw back yesterday’s losses this morning as investors were upbeat towards the UK economy after some impressive data releases.
Strong Data Allows Pound Australian Dollar (GBP AUD) to Recover
GBP AUD rallied by around a cent earlier today as traders were impressed by the UK’s latest Consumer Credit report. The ecostat showed that credit rose to £1.62bn in October, up from £1.48bn the month before, surpassing expectations that it would only see a modest rise to £1.50bn.
Market sentiment was also buoyed by a better than expected rise in mortgage approvals, as they climbed from 63,594 to 67,518 in October, surging past expectations that it would only reach around 65,000.
The rise helped to allay fears that the British economy has suffered after voting for ‘Brexit’, after both ecostats plummeted immediately after the referendum.
Chinese Commodity Futures Weigh on Australian Dollar
The Australian Dollar’s rally appears to have eased after a sudden decline in Chinese commodity futures.
The dip comes after weeks of unrelenting rises in commodity futures, with prices for Australia’s largest export, iron ore having surged to over $80 a tonne just yesterday, reaching a new 26-month high.
While the decline is largely insignificant, investors may fear that it could be a sign of underlying weakness in Chinese futures as it appears that the recent gains have been driven more by market speculation than fundamental factors, especially after China announced that it would be cutting steel production over concerns for the environment.
GBP AUD Forecast: Pound May Rise on Upbeat BoE Report
The Pound to Australian Dollar exchange rate may trend higher tomorrow if the Bank of England Financial Stability Report is upbeat about the UK’s economy in the face of ‘Brexit’.
However a dovish tone from the bank is likely to cause Sterling to slide, especially if the Gfk Consumer Confidence Survey reports a drop from -3 to -4 as predicted.
Meanwhile, HIA will release its latest New Home Sales data for Australia tomorrow, which could help the ‘Aussie’ advance if it continues its recent uptrend.
Looking long-term, the Pound is likely to face increased volatility in December ahead of the UK government attempting to overturn a ruling that it must have the backing of Parliament before it can begin the ‘Brexit’ process.
Current Interbank Exchange Rates
At the time of writing the GBP/AUD exchange rate was trending around 1.67 and the AUD/GBP exchange rate was trending around 0.59.
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