Pound Sterling to Australian Dollar (GBP/AUD) exchange rate = 1.7889
Pound Sterling Little Changed
• UK CPI Triggers Widespread Losses
The British Pound posted extensive and broad-based declines yesterday following the publication of the UK’s Consumer Price Index. The fact that inflation accelerated at a slower pace than economists forecast in July, relieving pressure on the Bank of England to bring forward rate hike expectations, saw Sterling soften to multi-month and multi-week lows against peers like the US Dollar, Euro and Australian Dollar.
Industry expert insight…
Business Editor Kamal Ahmed asserted; ‘The strength of sterling (up 14% since March 2013) has made imports cheaper – and in a cut throat retail world those savings tend to be passed on to consumers rather than pumped into better profit margins. The oil price is also falling due to a glut in supply and weak demand from the Eurozone. Domestically, low wage growth and negative food inflation are also taking pressure off any upward tick in inflation. The doves in the Bank of England will be preening their feathers – most economists think today’s figures push the prospect of an interest rate rise further into the future.’
KEY MOVEMENT: The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hit a low of 1.7833
• Australian Dollar Fluctuates after Stevens’ Comments
Overnight the Australian Dollar declined against almost all of its most traded peers in the wake of Reserve Bank of Australia Governor Glenn Stevens’ statement to the House of Representative Standing Committee. Although Stevens intimated that the RBA will be keeping interest rates low to facilitate domestic growth, he also stated that the central bank expects the Australian Dollar to fall in due course – meaning there is no need to intervene in the currency market at the present time. The Australian Dollar recovered initial losses after the speech was concluded.
Industry expert insight…
According to senior economist Michael Workman; ‘The Governor’s testimony indicates that other issues, besides monetary policy, are holding growth back. Namely, a consistent and sustained lift in business confidence is required which would lead to a higher non-mining business investment. The shift to more risk aversion by households and business restrains economic growth.’
The Australian Dollar was little-affected by the Westpac Leading Index, which showed a month-on-month decline of -0.1% in July. This wiped out the previous month’s gain of 0.1%.
• GBP to AUD Exchange Rate Forecast
The Pound to Australian Dollar (GBP/AUD) exchange rate was trending in a narrow range before minutes from the latest BoE policy meeting were released.
Some economists predicted that at least one member of the Monetary Policy Committee voted in favour of increasing interest rates at the last gathering, and Sterling was deriving modest support from that expectation.
KEY MOVEMENT: The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hit a high of 1.7901 before the BoE minutes were published.
The Pound went on to surge across the board as it transpired that two MPC members had voted in favour of increasing borrowing costs immediately.
As well as gaining by over 0.3% against the Euro and 0.15% against the US Dollar, the Pound posted a gain of 0.25% against the Australian Dollar.
The GBP to AUD pairing could hold these gains for the rest of the European session.
If tomorrow’s UK retail sales figures show the 0.4% month-on-month increase in sales anticipated, further Sterling gains could occur.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is trending in the region of 1.7925.
GBP/AUD Exchange Rate Holds Steady Despite Poor UK Data
Yesterday’s steady Pound to Australian Dollar exchange rate has continued this morning, despite poor UK Retail Sales data.
British retail sales grew by 0.5% in July which is better than forecast. However year-on-year Retail Sales only increased by 3.4% having been forecast to rise by 3.5%. The lower-than-expected yearly growth may overshadow July’s positive result.
Perhaps one reason why the Pound to ‘Aussie’ (AUD) exchange rate hasn’t softened considerably is negative manufacturing data from China. The Chinese Manufacturing PMI was forecast to dip slightly from 51.7 to 51.5, but the actual result saw a declination to 50.3. Given the strong trading relationship between Australia and China; it is likely that the Aussie will file losses against many of its major peers.
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, 0.9296,
Australian Dollar,,Euro, 0.6984,
Australian Dollar,,Pound, 0.5592,
Australian Dollar,,New Zealand Dollar,1.1060,
US Dollar,,Australian Dollar, 1.0760,
Euro,,Australian Dollar, 1.4313,
Pound Sterling,,Australian Dollar, 1.7893,
New Zealand Dollar,,Australian Dollar, 0.9033,
[/table]
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