The Pound Australian Dollar (GBP AUD) exchange rate has risen by around half a cent today as markets become more risk-adverse in the run up to the US elections.
Pound Australian Dollar (GBP AUD) Surges on US Political Uncertainty
The high-yield Australian Dollar (AUD) has been weakened by lower risk appetite as political uncertainty grows in the run up to the US presidential elections.
Following the news that Democratic candidate Hillary Clinton faces a new investigation into her email use during her time as US Secretary of State, recent polls have shown that the gap between Clinton and Republican rival Donald Trump has narrowed to around two points.
The possibility of a Trump presidency has caused investors to flock to ‘safe haven’ currencies like the Japanese Yen (JPY) and shun the more risk sensitive currencies like the ‘Aussie’ as they wait out the result.
Australian Dollar (AUD) Suffers from Disappointing Data
Australian Dollar (AUD) exchange rates were also hampered by disappointing Australian data released earlier today in which Australian building approvals unexpectedly plummeted from 10.3% to -6.4% in September, falling dramatically short of forecasts of 2.1%, causing the ‘Aussie’ to recede as approvals fell to their lowest point since November 2015.
Meanwhile the Pound was bolstered by a strong Markit UK construction PMI report which unexpectedly rose to 52.6 in October, up from 52.3 the previous month and significantly better than predictions it would fall to 51.8.
GBP AUD Forecast: Pound May Drop as BoE Rate Decision Approaches
The Pound to Australian Dollar exchange rate could slide ahead of tomorrow’s Bank of England (BoE) rate decision meeting as markets fear the possibility of further rate cuts by the Bank following comments last week from UK Chancellor Philip Hammond that he was willing to allow for additional quantitative easing should it be requested.
The Australian Dollar could strengthen overnight if the AiG performance of service index shows improvement in October. Additionally, in the long-term GBP AUD is forecast to slide as strong commodity prices lure hawkish investors to back to the high-yield ‘Aussie’ as they look to profit from the soaring price of iron ore as it reaches a 50% rise in 2016.
Current Interbank Exchange Rates
At the time of writing the GBP/AUD exchange rate was trending around 1.60 and the AUD/GBP exchange rate was trending around 0.62.
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