The British Pound to Australian Dollar (GBP/AUD) exchange rate fell on Wednesday after Australian Construction Work Done contracted less than forecast in Q4.
The ecostat fell by only -0.2% in the last three months of 2014 rather than the -1.0% forecast.
The British Pound to Australian Dollar (GBP/AUD) exchange rate was trending higher at the start of Tuesday’s European session as the ‘Aussie’ tracked the New Zealand Dollar lower–a result of the Reserve Bank of New Zealand (RBNZ) reducing its Two-Year Inflation Expectation from 2.1% to 1.80%.
Earlier… The British Pound to Australian Dollar (GBP/AUD) exchange rate continued to advance in Monday’s European session as investors forecast hawkish Bank of England (BoE) statements from Governor Mark Carney on Tuesday.
Earlier… The British Pound to Australian Dollar (GBP/AUD) exchange rate recorded +0.50% market movement in Monday’s European session ahead of CBI Reported Sales stats and as Bank of England (BoE) official Kristin Forbes made a speech.
BoE Rate Hike Speculation could Enable British Pound (GBP) Exchange Rate Gains
The last time Forbes spoke in late January, she suggested UK rate hikes could occur sooner than markets had forecast. Forbes stated that inflation could continue falling in upcoming quarters before rebounding more strongly and rapidly than predictions had suggested.
Forbes stated: ‘These scenarios, if they occur, would imply an earlier increase in interest rates than currently expected, especially in order to ensure that any subsequent interest rate increases are slow and gradual.’
While any hawkish tones from the BoE could see the British Pound rally, the Australian Dollar may soften in upcoming months as a result of tumbling oil prices.
Foreign exchange strategist Todd Elmer suggests: ‘I think that we are probably still overvalued when you look at the commodity currencies.’
Both the Australian Dollar and close counterpart the New Zealand Dollar (NZD) exchange rates were bolstered in Monday’s antipodean session as a result of Greece being granted an extension on its bailout programme.
Forex dealer Matt Richardson commented: ‘Buoyed by general US Dollar [USD] weakness and a spike in risk sentiment, the ‘Aussie’ benefited on a return in market optimism , as Greece and its creditors reached an eleventh hour deal to extend the current bailout programme for another four months.’
The ongoing situation within the Eurozone is likely to cause ripples in the market as investors’ risk appetite fluctuates.
British Pound to Australian Dollar (GBP/AUD) Exchange Rate Forecast
The British Pound to Australian Dollar (GBP/AUD) exchange rate could be in for movement on the release of CBI Reported Sales stat expected later in the European session. The CBI index is forecast to fall from 39 to 35 in February.
However, Tuesday could be a big day for the British Pound when Bank of England Governor Mark Carney testifies to the Commons Treasury and Committee.
It’s a heavy week for Carney appearances, which continue on Wednesday with the Governor making a speech at a research conference. Investors will be scrutinising Carney’s words for any hint of a rate hike—if any are detected the British Pound to Australian Dollar (GBP/AUD) exchange rate could rally.
Thursday’s UK Gross Domestic Product stat could offer the British currency some stability if it remains at 2.7% in the fourth quarter of 2014 on the year as forecast.
The British Pound to Australian Dollar (GBP/AUD) exchange rate resides at 1.9705. The Australian Dollar to British Pound (AUD/GBP) exchange rate is trending in the region of 0.5080.
