As a new week of trading began, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending around the day’s opening level of 1.8473.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Steady after Australian Reports
Although economic reports for Australia were on the negative side, an increase in gold prices prevented the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate from registering gains.
Economists had forecast a 1.7% increase in Australian home loans in November, but they actually fell by -0.7%.
Domestic investment lending slid by -2.2 following a positively revised increase of 0.5% in October.
Today’s UK Lloyds Employment Confidence report is unlikely to have much of an impact on the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate.
Earlier…
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate fell by around 0.5% on Friday even as positive UK data boosted the Pound against several of its other main rivals.
GBP/AUD Exchange Rate Declines even as UK Deficit Shrinks
UK economic reports might have boosted the Pound against peers like the Euro and US Dollar, but a number of other factors saw the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate decline.
The Pound was broadly stronger on Friday as UK manufacturing production figures impressed and the UK’s trade deficit narrowed.
According to figures compiled by the Office for National Statistics (ONS) the UK’s deficit in goods and Services narrowed from 2.2 billion Pounds in October to 1.4 billion Pounds in November. The easing in the shortfall was largely due to a decline in imports.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hit a high of 1.8648
As stated by the BBC; ‘Imports fell 1.1 billion Pounds in the month, which included a 0.7 billion Pound fall in oil imports. The price of Brent crude oil has fallen by more than 50% since August. The drop has been blamed on oversupply, in part as a result of increased domestic oil production in the US, and slowing demand, particularly in China. The UK’s 8.8 billion Pound deficit in goods was partly offset by its 7.4 billion Pound surplus in the supply of services.’
However, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate failed to gain as the ‘Aussie’ strengthened across the board.
The Australian Dollar to US Dollar (AUD/USD exchange rate advanced above the 81.00 US cents level and the AUD/EUR pairing rallied on general Euro weakness.
Although the US employment figures showed a stronger-than-forecast jobs gain in December, the price of gold was still up by 0.2% on the week.
Industry expert David Jollie asserted; ‘Gold and platinum should benefit most from strong Chinese demand ahead of the lunar (Chinese) New Year. Since 2001, the precious metals have typically performed well in price terms in January and February…even in extended periods of price weakness.’
Lower oil prices were also responsible for the ‘Aussie’s gains. As one industry expert observed; ‘One of the side benefits of lower (oil) prices may be a better than expected growth out of China which in turn could help boost Australia’s fortunes this year.’
Further Australian Dollar strength was derived from a decline in US average earnings, which reduced demand for the US Dollar. A Fed official also highlighted the risks attached to a 2015 interest rate increase.
While the US economy added over 250,000 positions (beating expectations for a jobs increase of 240,000), average earnings fell by -0.2% on the month.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate brushed a low of 1.8470
Australian Employment, UK CPI to Dictate GBP/AUD Exchange Rate Movement
In the week ahead the main causes of Pound Sterling to Australian Dollar (GBP/AUD) exchange rate fluctuations are likely to be the UK’s Consumer Price Index (out on Tuesday) and Thursday’s Australian employment stats.
Economists have forecast that the Australian economy added 2,200 positions in December following November’s mammoth 42,700 employment gain. This would leave Australia’s unemployment rate at 6.3%.
Above forecast employment figures could give the Australian Dollar a boost towards the end of the week.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
There are several other UK and Australian economic reports due out this week, like the British Retail Consortium’s like-for-like sales figure.
Movement in the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate may also be driven by fluctuations in the commodities market.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate closed out the week trading in the region of 1.8491
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate closed out the week trading in the region of 0.5406
On Sunday the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trading in the region of 1.8455
