Pound Sterling (GBP) Exchange Rate Edges Higher against the ‘Aussie’ (AUD) on Damp Market Sentiment
The British Pound to Australian Dollar (GBP/AUD) exchange rate advanced by around 0.4% during Thursday’s European session.
In general, the Pound depreciated versus its currency rivals on Thursday. The declination was initiated by concerns that services growth would disappoint, and plunged significantly once domestic data had confirmed said fears. August’s Services PMI was predicted to advance from 57.4 to 57.7, but the actual result saw growth in the sector drop to just 55.6.
Chris Williamson, Chief Economist at Markit, which compiles the Services PMI, stated; ‘Even after allowing for usual seasonal influences, August saw an unexpectedly sharp slowing in the pace of economic growth. The services PMI came in well below even the most pessimistic of economists’ forecasts and follows disappointing news of a stagnation in the manufacturing sector earlier in the week. Although construction industry growth remained resilient, the three PMI surveys collectively are pointing to the weakest monthly expansion since May 2013.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.1802.
Australian Dollar (AUD) Conversion Rate Declines versus the Pound Sterling (GBP) after Australian Retail Sales Contract Unexpectedly
Despite having seen robust growth during Wednesday’s European Session, the ‘Aussie’ lost significant ground against most of its currency competitors. The depreciation was initiated by the publication of the Federal Reserve Beige Book. The report showed that US officials were positive with regards to the rate of expansion in the US economy. Futures traders had to delay bets as to the timing of a Fed rate hike amid turmoil in China, but the Beige Book renewed hopes that the US central bank will increase the cash rate within 2015. This led investors to shy away from risk-correlated currencies.
Aiding the ‘Aussie’ downtrend was unexpected contraction in July’s retail sales by -0.1%. This overshadowed positive services growth and a narrowing of the nation’s trade deficit. Damp market sentiment aside, the South Pacific asset dived in response to bearish gold prices. Much like the change in market sentiment, gold prices dropped in response to near-term Fed rate hike hopes. ABN Amro said in a note that gold’s ‘safe haven character’ has been ‘overshadowed’ and ‘reduced significantly’ by ‘the arrival of gold products that opened the market to a wider public.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 2.1694 during Thursday’s European session.
Pound to Australian Dollar (GBP/AUD) Exchange Rate Forecast top Hold Gains ahead of US Labour Data
Given the absence of further domestic data publications pertaining to either nation, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold gains for the remainder of Thursday’s European session. With that being said, however, the US ISM Non-Manufacturing Composite has the potential to provoke wide-reaching volatility.
With a complete absence of Australian data on Friday, and with a lack of influential British data, the GBP/AUD exchange rate is likely to be subject to changes in market sentiment, commodities price fluctuations and US Dollar strength. Should Friday’s US labour market data provide positive results, the ‘Aussie’ is likely to tumble across the board.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate climbed to a high of 2.1862 during Thursday’s European session.
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