With an absence of data on Friday, the weakening in the Australian Dollar has continued as a result of declining trader risk sentiment amid rising geopolitical tensions. Sterling is clinging on to the gains made from Bank of England Governor Mark Carney’s hawkish speech.
The Pound Sterling to Australian Dollar exchange rate is currently trending in the region of 1.8592.
Thursday was a good day for Sterling after Bank of England Governor Mark Carney gave a speech in Wales. In the speech he intimated that the majority of the prerequisites for normalising monetary policy have now been met, and a bank rate increase is drawing closer.
The Australian Dollar took a tumble on Thursday after Reserve Bank of Australia Governor Glenn Stevens gave a speech at the Melbourne Economic Forum. He stated ‘Investor finance is growing at double-digit rates. I have certain scepticism about macro-prudential tools as a panacea, but I remain open to using them if it seems sensible to do so and that’s the kind of thing we have in mind right now’.
The Pound Sterling to Australian Dollar exchange rate hit a low today of 1.8519.
Friday’s British data printed relatively poorly, although it has had little effect on Sterling movement. The yearly Hometrack Housing Survey fell from 5.5% to 5.0%.
Sterling has, however, softened a little against many of its most traded currency competitors. This could be as a result of trader profit locking after the initial surge from Carney’s speech. It could also be attributed to the increased likelihood that Prime Minister David Cameron will get the go ahead from parliament to join the US airstrikes on Israeli militants in Syria and Northern Iraq.
A complete absence of Australian data on Friday has seen the ‘Aussie’ (AUD) continue to soften against weak risk sentiment. As geopolitical issues become ever more chaotic traders tend to pull away from risk-sensitive currencies, such as the ‘Aussie’, and instead invest in safe-haven assets.
Forecast for the Pound to ‘Aussie’ Exchange Rate
The Reserve Bank of Australia’s Tony Richards is due to speak in Chicago later on Thursday, although most economists believe that the speech will parrot the issues addressed by Glenn Stevens.
There is a reasonably high likelihood that the Pound will continue to hold a high position over the weekend with nothing in terms of economic data to curtail the trend. There is the slight possibility that trader profit locking could bring Sterling back down to earth.
The Pound Sterling to Australian Dollar exchange rate has reached a high today of 1.8631.
