Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Advance Even after Dovish BoE Weighs on Investor Sentiment
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate ticked higher by around 0.7% on Friday afternoon.
Although the British asset is holding a comparatively weak position versus its major peers following the dovish Bank of England (BoE) growth and inflation outlook, the Pound recovered some of its losses on Friday afternoon. This is in response to improved Federal Reserve rate hike bets following a particularly positive Non-Farm Payrolls result. The BoE is expected to move after the Fed so tighter policy in North America may encourage Monetary Policy Committee (MPC) members to dissent from Governor Mark Carney’s dovish outlook. The resultant drop in Euro valuation also encouraged increased demand for the Pound Sterling.
British economic data produced mixed results today but erred towards positivity. September’s Industrial Production saw slower-than-anticipated growth, but Manufacturing Production contracted less-than-anticipated in the same month. September’s Trade Balance data also eclipsed median market forecasts. However, positive data and improved Fed rate hike bets aside, the overwhelmingly dovish BoE yesterday is still likely to weigh on investor sentiment.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.1429.
Australian Dollar to Pound Sterling (AUD/GBP) Conversion Rate Predicted to Decline on US Non-Farm Payrolls
In the early stages of Friday’s European session the Australian Dollar rallied versus many of its currency rivals. The appreciation was the result of the combination of improvement in the AiG Performance of Construction Index, in addition to the Shanghai Composite Index officially ending the week in a bull market. Gains were short-lived, however, after falling iron ore prices and US Dollar strength saw dampened demand for the high-yielding, commodity-correlated currency.
The US Dollar uptrend is the most significant factor contributing to the ‘Aussie’ (AUD) depreciation. After US Non-Farm Payrolls eclipsed expectations with a massive 271,000 newly employed, prospects for a December Federal Reserve benchmark interest rate hike improved dramatically. This saw dampened demand for the high-yielding Australian Dollar and is likely to weigh for some time to come.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 2.1130 during Friday’s European session.
Pound Sterling to Australian Dollar Forecast: Fed Rate Hike Bets to Provoke GBP/AUD Gains
Ahead of the UK NIESR Gross Domestic Product Estimate for October, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold gains. Even if the data surprised to the downside the British asset could still hold its advance against the South Pacific currency given the extent of today’s US Dollar gains.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate advanced to a high of 2.1444 during Friday’s European session.
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