The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate strengthened to trade at 1.87 on Thursday as concerns over the global economy and strengthening US Dollar weighed heavily upon the ‘Aussie’.
As the session progressed the Pound Sterling exchange rate continued to advance against the ‘Aussie’ as UK services PMI data came in better than forecast.
On Wednesday the Pound to Australian Dollar (GBP/AUD) exchange rate rallied as data released by the Australian Statistics Bureau showed that the Australian economy expanded at a slower rate than forecast in the third quarter of the year. Against the US Dollar the ‘Aussie’ declined to a fresh 4-year low.
On Tuesday, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate continued to be softer after construction PMI data out of the UK disappointed economists and as the Reserve Bank of Australia (RBA) chose to leave interest rates unchanged at 2.5%.
A rise in oil prices also offered support to the commodity based ‘Aussie’ and sent the currency climbing away from a four and a half year low against the US Dollar.
The ‘Aussie’ rose against the Pound and other peers after the Reserve Bank of Australia left interest rates unchanged and once again said that it intends to leave rates low for an extended period in order to continue to encourage economic growth.
RBA Governor Glenn Stevens said; ‘The most prudent course is likely to be a period of stability in interest rates.’
Also supporting the Australian Dollar exchange rate was positive domestic data releases. According to the Australian Bureau of Statistics, the number of building approvals issued increased by 11.4% in October, beating expectations for a rise of 5.2% meaning that approvals recovered strongly. Septembers figure was also revised to a -11.2% decline from the previous 11% drop.
A separate report also showed that Australia’s current account deficit narrowed more than forecast to A$12.5 billion in the third quarter. Economists had been expecting the current account deficit to narrow to A$13.5 billion.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
The ‘Aussie’s’ gains are likely to be relatively short-lived as some economists raised their bets that a weakening Australian and global economy will force the RBA to cut interest rates over the course of next year.
The view is in stark comparison by rhetoric from RBA economists who believe that the banks next move will be to raise rates.
Deutsche Bank economists changed tack on their cash rate outlook, saying they now expect the RBA to cut by half a percentage point in 2015, taking it to 2 per cent, in what may be the first of a number of radical rethinks on the direction of monetary policy in Australia.
Pound Sterling to Australian Dollar Exchanges:
The Pound Sterling to Australian Dollar Exchange Rate is trading in the region of 1.872
The Pound Sterling to Australian Dollar Exchange Rate hit a session high of 1.875
The Pound Sterling to Australian Dollar Exchange Rate hit a session low of 1.862
