The British Pound to Australian Dollar (GBP/AUD) exchange rate climbed 0.4% during the Australasian session as the prospect of Federal Reserve rate hikes taking place sooner-than-forecast pressured commodity-currencies lower.
British Pound to Australian Dollar (GBP/AUD) Exchange Rate Trending Higher, AUD/USD Remains Below 77 Cents
The Australian Dollar posted broad-based declines at the close of last week as the US Non-Farm Payrolls report smashed expectations, upping the odds of a summer Fed rate increase.
Stronger US interest rates reduce the appeal of higher-risk assets, so currencies like the ‘Aussie’, ‘Kiwi’ and South African Rand were driven lower by the data.
As well as tumbling against the Pound, the Australian Dollar fell below 77 cents against the US Dollar and held on to declines over the weekend.
The British Pound to Australian Dollar (GBP/AUD) exchange rate hit a low of 1.9652
Demand for the ‘Aussie’ was also limited after Chinese trade data showed that the number of imports to the Asian nation fell by -20.5% on an annual basis in February.
As China is Australia’s main trading partner, this report took a toll on the Australian Dollar at the start of the week.
Positive domestic job advertisements and manpower reports did little to slow the ‘Aussie’ downtrend and the GBP/AUD exchange rate recorded additional gains following the publication of the ANZ Roy Morgan Weekly Consumer Confidence Index.
The gauge of sentiment dipped from 112.5 to 110.3 in the week ending March 8th.
The National Australia Bank Business Confidence measure also dropped from 3 in January to 0 in February while the NAB measure of Business Conditions held at 2.
According to NAB; ‘By industry, manufacturing and construction improved the most, more than unwinding a surprise drop in construction last month to be in positive territory again. In contrast, mining dropped sharply in line with weaker commodity markets and less favourable movements in the Australian Dollar.’
Similarly, economist Tom Kennedy observed; ‘Confidence in Australia’s business community is now tracking at the lowest level since the federal election in 2013, with firms seemingly shrugging off last month’s rate cut and instead focusing on recent negative political and economic news flow.’
The British Pound to Australian Dollar (GBP/AUD) exchange rate achieved a high of 1.9780
During Australasian trading China’s Producer Price Index printed at -4.8% in Feb (rather than the -4.3% expected) but the nation’s Consumer Price Index rose from 0.8% to 1.4% on the year.
The British Retail Consortium’s like-for-like sales figure had little impact on British Pound to Australian Dollar trading.
British Pound to Australian Dollar (GBP/AUD) Exchange Rate Forecast: Australian Confidence, Employment Data Ahead
As the week progresses, the British Pound to Australian Dollar (GBP/AUD) exchange rate could experience volatility as a result of Australia’s Westpac Consumer Confidence Index, Home Loans and Investment Lending figures.
Investors with an interest in GBP/AUD trading will also be focusing on China’s Industrial Production/Retail Sales stats and the UK’s Industrial/Manufacturing Production reports.
However, ‘Aussie’ movement may be a little restrained ahead of the release of Australia’s latest employment data (due out on Thursday at 00:30 GMT).
The nation’s unemployment rate is expected to hold at 6.4% after a 15,000 increase in positions.
A better-than-expected result could help the ‘Aussie’ recoup some of its recent losses.
The Australian Dollar to US Dollar (AUD/USD) exchange rate was trending in the region of 0.7621, The Australian Dollar to Euro (AUD/EUR) exchange rate was trending in the region of 0.7089, The British Pound to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 1.9749, The Australian Dollar to British Pound (AUD/GBP) exchange rate was trending in the region of 0.5062
