With Tuesday being packed with market moving economic data releases the Pound and other major currencies are forecast to experience volatility.
The Australian Dollar (AUD) managed to shrug off some of Monday’s declines to regain ground against the Pound (GBP) and other peers after the market deemed that the US Dollars recent strong rally has been overdone. A separate analysis also said that the ‘Aussies’ recent declines have also been too sharp over the past few weeks.
That news alone was enough to support the ‘Aussie’ and caused traders of the currency to shrug off the release of disappointing Manufacturing Purchasing Managers Index data out of China.
‘It just looks as though the market might have gorged itself on US Dollars a bit too much in recent weeks,’ said Sean Callow, a strategist from Westpac Banking Corp.
The New Zealand Dollar (NZD) however was unable to take advantage of the softening US Dollar after a business confidence report compiled by ANZ showed that confidence fell to its lowest level in more than two years in September. The index fell from Augusts’ reading of 24.4 to 13.4.
New Zealand’s currency continues to be under broad selling pressure last week after Reserve Bank of New Zealand Governor Graeme Wheeler signalled that he is prepared to sell the nation’s currency to weaken it.
Since the start of 2014, expectations for New Zealand’s economic growth have slowed, with the Treasury last month cutting its forecast for gross domestic product growth to 3.8% in the year ending March 31, 2015, from a previous estimate of 4%.
Sterling meanwhile was experiencing volatility because of mixed data releases. Overnight a report showed that Consumer Confidence fell and another showed that UK house prices fell more than expected in September.
Further losses against the ‘Aussie’ were restrained however due to the release of data, which showed that the UK economy expanded faster than expected in the second quarter of the year. According to the Office for National Statistics, the economy expanded by 0.9% after the data was revised up from 0.8%.
Countering the positive GDP data however was a separate report which showed that the UK’s Current Account deficit widened to £-23.1 billion from £-18.5 billion. Business investment in the second quarter also dropped from 5% to 3.3%.
Pound Sterling to Australian Dollar Exchange Rate Forecast
Wednesday promises to be another volatile day for the GBP/AUD exchange rate as the market awaits the publication of the latest manufacturing and retail sales data out of Australia.
The major data release due for the Pound will be the latest Markit Manufacturing PMI data.
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,0.8745 ,
Australian Dollar,,Pound Sterling,0.5377 ,
Australian Dollar,,Euro,0.6892 ,
Australian Dollar,,New Zealand Dollar,1.1230 ,
US Dollar,, Australian Dollar ,1.1436 ,
Pound Sterling,, Australian Dollar ,1.8594 ,
Euro,, Australian Dollar ,1.4498 ,
New Zealand Dollar,, Australian Dollar ,0.8896 ,
[/table]
