The Pound Australian Dollar exchange rate has fallen slightly today, while the coming months are expected to bring a great deal more Sterling volatility.
GBP AUD Exchange Rate Update: Slight Decline for Sterling seen despite Surprise Rise in Manufacturing PMI
The Pound Australian Dollar exchange rate has fallen by a small amount today, mainly due to the Australian Dollar being a much stronger option.
UK news so far this year has been highly positive, with the December manufacturing PMI showing a rise from 53.6 to 56.1, against forecasts of stagnation.
Despite this seemingly positive result, however, some economists remained sceptical, including ING Senior Economist James Knightly, who observed that;
‘While the strength of the manufacturing sector is good news, the likely weakness in the much larger consumer sector will more than offset it. Therefore we expect GDP growth to slow to a little above 1% in 2017 from 2.2% in 2016’.
For the Australian Dollar, the start of 2017 has been positive, with Monday night’s AiG manufacturing index for December boosting AUD demand by rising from 54.2 to 55.4.
After a quiet Christmas period, the latest Australian news has concerned the future of the nation’s AAA credit rating; ratings agency Standard and Poor’s has recently been pessimistic about the government’s ability to keep the Australian economy performing at the right level for AAA status.
Pound Australian Dollar Exchange Rate Prediction: GBP Crash Expected if Government Win Article 50 Appeal
Now that the holiday period is over and ‘business as usual’ is resuming, economists are looking ahead to some of the major incoming events of 2017.
For the UK, these will start with the biggest focus of last year, Brexit. This will come most clearly in the near-term, when the Supreme Court announces its verdict on the Government’s Article 50 appeal that came over November and December.
Should the Court rule in favour of the Government, then the Pound could well plummet further against the Australian Dollar, given that this will prevent Parliamentary modification of the Government’s tone and stance on leaving the EU.
Conversely, blocking the appeal may see Sterling rally, given that as well as being delayed, the triggering of Article 50 may also come with a move towards a more desirable ‘Soft Brexit’.
AUD GBP Exchange Rate Outlook: Iron Ore Forecasts Remain Source of Optimism for Australia
Aside from any unforeseen adjustments to Australia’s credit rating, the next source of influence over the AUD GBP exchange rate is likely to be the cost of iron ore.
For the moment, at least, it looks as though AUD investors have little to worry about, given that Chinese steel production forecasts remain high for 2017.
Recent Interbank Exchange Rates
At the time of writing, the Pound Australian Dollar (GBP AUD) exchange rate was trending in the region of 1.70 and the Australian Dollar Pound (AUD GBP) exchange rate was trending in the region of 0.58.
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