Pound (GBP) on Downtrend Today ahead of UK GDP News, ‘Aussie’ (AUD) Holding Gains
With traders taking a cautious approach in advance of the UK’s latest GDP reading the GBP/AUD exchange rate has continued in a persistent downtrend. Sentiment towards the ‘Aussie’ (AUD) remained positive overnight after another round of disappointing US data and declining odds of a 2015 interest rate hike from the Fed.
Earlier…
A less-than-encouraging UK BBA Loans for House Purchase figure has failed to boost the GBP/AUD pairing this morning, as the ‘Aussie’ holds its bullish form.
Shock Chinese Interest Rate Cut Bolstered Demand for ‘Aussie’, GBP/AUD Exchange Rate Slumped to Weekly Low
Sentiment towards the ‘Aussie’ (AUD) saw a significant boost on Friday as the People’s Bank of China (PBoC) unexpectedly announced another cut to interest rates. Slashing another 0.25 percentage points from its baseline interest rate, this pushed the central bank’s lending rate down to 4.35%. Following the weakening of the Chinese third quarter GDP this somewhat eased concerns that the domestic economy could be in for a hard landing, although some traders remained sceptical that this measure would prove sufficient to counter the persistent slowdown afflicting the world’s second largest economy. However, as the initial market reaction was generally positive and the move seemed to reduce the odds of a December interest rate rise from the Fed, the GBP/AUD exchange rate slumped dramatically to a weekly low of 2.1118.
Sterling (GBP) on Downtrend after Weak UK House Loans Data, Australian Dollar (AUD) Remains Dominant Today
Monday has seen the appeal of the Pound (GBP) diminish somewhat, thanks to an unanticipated slump on the UK’s September BBA Loans for House Purchase figure. As pundits had expected a modest uptick in lending, this dealt a blow to confidence in the domestic housing market, suggesting that the local economy remains in a relatively fragile state. With bets declining on the prospect of the Fed beginning the cycle of monetary tightening before the end of the year amid the decided dovishness of other central banks, the chances of a nearer-term move from the Bank of England (BoE) also appear to be on the decline.
GBP/AUD Exchange Rate Forecast: Upcoming Australian Consumer Price Index May Extend ‘Aussie’ Gains
As Tuesday’s third quarter UK Gross Domestic Product is expected to show no change on the year at 2.4% the Pound may experience a rally, so long as local economic growth does not show a decline. A stronger showing here could prompt the GBP/AUD pairing to retake ground, with traders encouraged to favour Sterling with this sign of continued economic health within the UK.
The antipodean currency, however, could extend its gains on Wednesday with the publication of the third quarter Australian Consumer Price Index. Inflation is forecast to have risen from 1.5% to 1.7% on the year, which could help to diminish the prospect of any imminent interest rate cuts from the Reserve Bank of Australia (RBA).
Current GBP, AUD Exchange Rates
At time of writing, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was slumped in the region of 2.1135, while the Australian Dollar to Pound Sterling (AUD/GBP) pairing made bullish gains in the range of 0.4730.
Comments are closed.