- GBP/AUD Exchange Rate Depreciates Further – Pound down on polling data, AUD supported by domestic news.
- EU Ref Poll Deflates Previously Strong Sterling –Swing towards pro-‘Brexit’ sentiment, mirroring similar polls last week.
- Strong Australian Market Data Bolsters the ‘Aussie’ – Nearly 5 cents up from last week
- Is the RBA Set to Cut Rates? – Forecasters point towards the central bank cutting rates to weaken an over-valued Australian Dollar.
GBP/AUD Exchange Rate Extends Previous Losses
Events in the past week have allowed the Australian Dollar to rally against the Pound as Sterling is continually cut down due to ‘Brexit’ concerns.
The latest poll shows the UK leaning towards pro-‘Brexit’, furthering uncertainty over the UK’s future within the union. US non-farm payrolls data was released last week to a resounding groan as the realised number of new jobs (38,000) paled in comparison to the 160,000 forecasted.
This prompted a drop in confidence in the US economy, pushing investors towards the more risky commodity-collated currencies like the ‘Aussie’, which was left feeling mighty after a week of AUD-boosting data.
The GBP/AUD exchange rate currently sits at 1.95, down from last week’s high of 2.00.
Latest YouGov Poll Indicates Shift towards Pro-‘Brexit’ Sentiment in the UK
Continuing the trend of late, the Pound saw another ‘Brexit’ poll related slide. YouGov’s latest poll shows ‘Brexit’ edging just four points in front of the ‘Remain’ camp, prompting investors to continue to stay cautious as the vote is only a few weeks away.
A week of lacklustre data cemented the Pound’s downfall; the UK’s construction PMI fell 0.8%, house prices dropped, mortgage approvals declined and two polls put the ‘leave’ camp ahead. This all adds up to a weakened Pound that may only find stability again after the referendum.
GBP/AUD has seen steady depreciation today as the recently released data starts to impact the market, with the ‘Aussie’ looking to stay steady for the time being.
Strong Aussie Data Bolsters AUD ahead of Possible Reserve Bank of Australia Rate Cut
Aussie data released last week, of which the majority was positive, gave the Australian Dollar a healthy boost. A near doubling of month-on-month GDP and a report stating the Australian services industry is improving were the major issues, with the decrease in the trade deficit also helping.
It’s not all good news however as monthly retail spending nearly halved compared to the previous month, perhaps showing a change in Aussie consumer confidence.
The biggest impact has come in the form of a release of a US non-farm payrolls report showing a paltry increase of 38,000 non-farm jobs, compared to a forecasted 160,000. The subsequent gut-blow to the ‘safe haven’ US Dollar has pointed investors towards to more risky ‘Aussie’.
Pound’s Uncertain Future Dictated by Upcoming UK Data and News from Australian and US Central Banks
US Federal Reserve Chairwoman Janet Yellen is expected to give a speech in Philadelphia later today. Dependant on the rhetoric being either hawkish or dovish, the speech may prompt investors to continue their recent exodus from the safe US Dollar towards the more lucrative yet risky ‘Aussie’.
‘Brexit’ fears continue to cloud the Pound’s future as uncertainty is only increasing the closer we get to the vote, though the rest of this week could prove as Sterling’s salvation. Industrial, manufacturing and construction output data is pegged to be released from Wednesday onwards but analysts are not holding their breath for good news.
Australia’s central bank is set to announce whether it will be modifying its rates tomorrow. It’s generally forecast that the central bank will choose to cut their rates to devalue the ‘Aussie’. While good for Australia’s trading partners, this could mean investors will shy away from the already volatile currency as all the risk associated with the AUD would be unchanged while the return would be lessened.
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