Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Advance despite Mixed UK CBI Data
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate advanced by around 0.3% on Monday afternoon.
In response to less-than-ideal domestic data from the Confederation of British Industry, the Pound softened versus most of its currency rivals. Whilst the first-quarter CBI Business Optimism Index improved from -12 to -4, January’s CBI Industrial Trends Orders softened from -7 to -15. Although Sterling ended last week in a comparatively strong position, gains were short-lived with the forthcoming EU referendum hindering investor confidence. Additional headwinds can be linked to concerns that the combination of weak wage growth, low inflation and poor global economic conditions will cause the Bank of England (BoE) to delay tightening monetary policy for a considerable time to come.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.0422.
Crude oil prices pared recent gains today following news from Saudi Arabia that they intend to keep production levels high. Also aiding the oil price declines was a report that showed Chinese diesel consumption dropped for the fourth consecutive month. This weighed heavily on trader risk-appetite despite improvement seen in Asian stock values. As a high-yielding asset, the ‘Aussie’ (AUD) softened in response to demand for safe-haven assets. Also adding to the Australian Dollar depreciation was disappointing domestic data. NAB Business Conditions in December declined from 10 to 7, whilst NAB Business Confidence also declined from 5 to 3 in the same month.
‘Recent financial market turmoil highlights the risks to the outlook, but has not fundamentally changed our view of the Australian economy,’ said NAB Group chief economist Alan Oster. ‘While business confidence took a step back… the index remained encouragingly resilient – and positive – with the index only falling from 5 to 3.’
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Rise as Tanking Crude Prices Weigh on Trader Risk-Appetite
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate climbed by around 0.4% on Monday afternoon.
In response to the Confederation of British Industry data, Samuel Tombs, chief UK economist at the consultancy Pantheon Macroeconomics, said: ‘The CBI industrial trends survey for January and the first quarter suggests that the manufacturing downturn is being prolonged by sluggish world trade and the still-strong Pound. Past experience shows that changes in the exchange rate take at least a year to influence exports, so Sterling’s recent decline won’t provide swift relief.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.2019.
Much like its Oceanic neighbour, the New Zealand Dollar declined versus most of its major peers as market sentiment continued to cool. With markets closed for a national holiday, the ‘Kiwi’ (NZD) is likely to remain trending lower, especially with trader risk-appetite showing no signs of a swift turnaround. Also weighing heavily on demand for the New Zealand Dollar are falling dairy prices with many fearing the industry is unsustainable with prices at current levels.
Pound Sterling Exchange Rate Forecast: Q4 GDP in Focus This Week
Although the British data docket this week is competitively sparse of influential domestic data, Thursday’s fourth-quarter British Gross Domestic Product is likely to be highly impactful. With concerns regarding BoE rate hike delays and uncertainty surrounding the forthcoming EU referendum, however, even a positive result may not be enough to sustain a Sterling appreciation.
For those invested in the Australian Dollar, Wednesday’s Consumer Prices data is likely to provoke volatility. Wednesday will also see the Reserve Bank of New Zealand (RBNZ) interest rate decision, another key event.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending within the range of 2.0344 to 2.0462.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending within the range of 2.1895 to 2.2077 during Monday’s European session.
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