GBP to AUD Exchange Rate firmer as traders take a breather, AUD/USD forecast to hit 95 cents

The GBP to AUD exchange rate firmed on Monday after traders eased off from the ‘Aussie’ following its recent surge to multi week highs.

Pound Sterling strengthened over the weekend after data showed that house prices in the UK increased for a 14th consecutive month in March, the longest run of increases in close to seven years. The average value of property in England and Wales climbed by 0.6% from February. The currency is likely to find further support from the session’s latest mortgage approvals data.

The ‘Aussie’ meanwhile remained supported from speculation that China, Australia’s biggest trading partner, will soon introduce stimulus measures following the recent run of disappointing economic data releases.

“There’s been plenty of talk about China adding stimulus via lower rates soon, which has been one of the major reasons for the Aussie Dollar strength. Even if we do get stimulus this week I am not sure the market will be that happy with it unless it’s in a major way,” said a forex dealer.

The market is also raising its expectations that the Reserve Bank of Australia will raise interest rates before the end of the year. Those expecting a rise rose from 16% to 32%. May 2015 however is being regarded as the date when rates will definitely rise.

The AUD to USD exchange rate remains above the 92 cents level. Some economists are forecasting that it could reach as high as 95 cents over the next few months.

The ‘Aussie’ is likely to experience some movement on Tuesday due to the RBA board meeting and Thursday’s speech by RBA Governor Glenn Stevens. If he reiterates that the Australian economy is performing well and does not attempt to talk down the currency we can expect the Aussie to resume its upward trend against the Pound and other major peers.

Tuesday’s manufacturing PMI data release out of China is also likely to cause volatility. Another weak figure is sure to increase speculation and calls for stimulus measures in the world’s second largest economy.

Australian Dollar (AUD) Exchange Rates

[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,,US Dollar,0.9231 ,
Australian Dollar,, Pound Sterling,0.5553 ,
Australian Dollar,,Euro,0.6718 ,
Australian Dollar,,New Zealand Dollar,1.0661 ,
[/table]