The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate fell by over 0.3% on Wednesday. During the Australasian session a lack of domestic data did limit ‘Aussie’ movement but the currency continued trending in a stronger position thanks to the Reserve Bank of Australia’s (RBA) neutral interest rate decision.
On Tuesday the central bank announced that interest rates would be left on hold at 2.5% and that a policy of interest rate stability would be pursued for some time to come.
Although the RBA did mention the strength of the local currency, calling its exchange rate ‘high by historical standards’, it held off from attempting to talk down the asset with an aggressive rhetoric and the Australian Dollar benefited.
As stated by economist Michael Blythe; ‘The statement is strictly neutral in tone. The debate will increasingly be about how long the period of stability can last. We recently shifted our rate-rise call from November to February.’
The Pound Sterling to Australian Dollar exchange rate fell to a low of 1.8055 on Wednesday.
Although the Pound had been supported against its peers on Tuesday as the UK’s Services PMI came in above expected levels, the British asset failed to rally against a bullish US Dollar and was struggling against the ‘Aussie’.
On Wednesday Sterling trimmed some of its recent gains as the British Retail Consortium’s Shop Price Index showed a year-on-year decline of -1.9% in July, steeper than the drop of -1.6% anticipated and worse than the -1.8% drop recorded in June.
This disappointing report was followed by below forecast gains in UK Industrial and Manufacturing Production figures. Both Industrial and Manufacturing Production were shown to have increased by 0.3% on the month in June, half the 0.6% gains anticipated.
On the year, the level of industrial production in the UK was up 1.2%, down from an annual increase of 2.3% in May. Similarly, 1.9% the year-on-year increase in manufacturing production was a marked decrease from the previous month’s 3.7% annual figure.
One London-based economist said this of the result; ‘The last couple of months do hint at some cooling off in the near-term momentum.’
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
The Pound Sterling to Australian Dollar exchange rate could extend declines overnight if the Australian employment figures exceed expectations.
The Australian economy is believed to have added 13,200 positions in July, with the unemployment rate holding at 6.0%.
A better-than-expected result would be Australian Dollar beneficial.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 1.8077.
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, 0.9315,
Australian Dollar,,Euro, 0.6970,
Australian Dollar,,Pound, 0.5528,
Australian Dollar,,New Zealand Dollar, 1.1026,
US Dollar,,Australian Dollar, 1.0740,
Euro,,Australian Dollar, 1.4341,
Pound Sterling,,Australian Dollar, 1.8074,
New Zealand Dollar,,Australian Dollar, 0.9054,
[/table]
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