Newsflash – GBP/AUD, GBP/NZD Exchange Rates Trending in Narrow Range
On Wednesday the Pound Sterling to Australian Dollar (GBP/AUD) and Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rates were largely trending around the day’s opening levels in spite of the UK publishing disappointing manufacturing data.
The fact that a Greek aid deal is unlikely to be brokered before Sunday’s referendum had a negative impact on demand for higher-risk currencies.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.0381
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending in the region of 2.3140
Earlier…
While the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate edged away from its recent 71-month high on Tuesday, the GBP/NZD currency pair gained over 1% to trend close to its best exchange rate for five years.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Movement Driven by Greek Default/Grexit Concerns, Gold Price Rise, RBA Comments
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in a slightly softer position during the European session due to a number of factors.
Although demand for higher-risk currencies like the Australian Dollar was limited as a result of fears Greece will default on today’s repayment to the International Monetary Fund (IMF) and come a step closer to leaving the Eurozone, the ‘Aussie’ was able to recoup previous losses as the week continued.
Rising gold prices, due to investors seeking safe-haven assets, also lent the Australian Dollar support against its British peer, as did Bank of England (BoE) chief economist Andy Haldane commenting on the likelihood of UK interest rates being cut.
Another development which drove the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate to a low of 2.0426 was the Reserve Bank of Australia’s (RBA) latest policy remarks.
RBA Governor Glenn Stevens indicated that loose fiscal conditions are likely to remain in place for some time to come, but as he refrained from hinting at the prospect of further rate cuts the ‘Aussie’ was able to climb.
Stevens stated; ‘More has been asked of central banks, under circumstances in which monetary policy might reach the limits of effectiveness, and yet at a time when it seems the ability of other macroeconomic policies to contribute to growth has lessened. A previous generation of central bankers, who fought lengthy battles to rid their respective countries of high inflation, are surely looking on in disbelief.’
GBP/AUD declines were limited thanks to the UK’s Consumer Confidence and GDP reports coming in strongly.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Close to Best Exchange Rate Since 2010 on RBNZ Rate Cut Bets
While the Pound declined against the ‘Aussie’ on Tuesday, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate remained bullish and returned to trending in the region of 5-year highs.
The New Zealand Dollar was pressured lower against a number of its currency counterparts as domestic housing, business confidence and activity outlook data fell flat – increasing the odds of the Reserve Bank of New Zealand (RBNZ) looking to slash borrowing costs later this year.
According to industry expert Sam Tuck; ‘We saw competitors call for a forth cut this year and that upped the ante. ANZ still expects three cuts this year, but markets were quite interested in that so ‘Kiwi’ was under pressure.’
GBP/AUD, GBP/NZD Exchange Rate Forecast: Pound Sterling Could Hit New Highs against Australian Dollar, New Zealand Dollar if Greece Defaults and UK PMIs Match Predictions this Week
Both the Pound Sterling to New Zealand Dollar (GBP/NZD) and Pound Sterling to Australian Dollar (GBP/AUD) exchange rates could achieve fresh highs as the week progresses if the UK’s upcoming Manufacturing, Construction and Services PMIs support the belief that the pace of UK expansion accelerated in the second quarter.
Furthermore, if Greece defaults on its IMF payment tonight (putting the nation under extra pressure ahead of Sunday’s referendum) higher-risk currencies like the ‘Aussie’ and ‘Kiwi’ are liable to decline.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.0457 while the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was achieving 2.3250.
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