Better-than-expected UK Retail Sales in September have helped to boost the GBP/AUD exchange rate to a two-week best on Thursday morning.
Pound (GBP) Hawkish after Lower UK Public Sector Net Borrowing Figure
Early on Wednesday the Westpac Leading Index helped to boost the ‘Aussie’ (AUD) as it showed a rise on the month and growth of 0.1%, as opposed to a decline of -0.3% in August. Suggesting that the domestic economy was continuing to experience a general improvement, in spite of more negative global headwinds and poor Chinese data, this helped to shore up the antipodean currency in early trading.
While investor caution held down the Pound (GBP) ahead of the UK’s Public Sector Net Borrowing report the actual figure was quick to spur a resurgence for the currency. Bettering expectations, government borrowing narrowed to 8.6 billion Pounds in September, which was also a decided improvement over the 10.8 billion spent in August. With new debt at a lower level, this boded well for the sustained pace of recovery within the domestic economy. Also of support for Sterling on Wednesday were comments from Bank of England (BoE) Governor Mark Carney who appeared to be supportive of the pro-EU campaign, iterating the financial benefits of the UK’s European Union membership.
UK Retail Sales Surge to take GBP/AUD Currency Pair to Two-Week Best Rate Today
‘Aussie’ sentiment took another blow this morning as the third quarter NAB Business Confidence Index slumped from 4 to 0, rather weakening the impression of a healthier Australian economy. In response traders were quick to move away from the antipodean currency, as odds continue to be drawn on the possibility of a 2015 interest rate hike from the Fed.
The GBP/AUD exchange rate benefitted even further with the release of the September UK Retail Sales figures, which showed a greater leap in consumer spending than had been anticipated. While forecasts had predicted a rise of 4.7% on the year, this was dwarfed by the actual growth of 5.9%, an increase which was partially attributed to the Rugby World Cup. Consequently the GBP/AUD pairing surged to a two-week best of 2.1459.
GBP/AUD Exchange Rate Forecast: Australian Dollar Movement Predicted to be Driven by US Dollar (USD) Sentiment
As domestic data will be lacking for both the Pound and the ‘Aussie’ ahead of the weekend, the pairing is unlikely to experience particularly strong volatility. However, upcoming US figures including the October Manufacturing PMI and September Leading Indicators results could prompt movement for the antipodean currency in reaction to any strengthening of the US Dollar (USD).
Current GBP, AUD Exchange Rates
At time of writing, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was climbing in the region of 2.1436, while the Australian Dollar to Pound Sterling (AUD/GBP) pairing slumped in the range of 0.4663.
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