Rising Chinese and Australian Manufacturing Set ‘Aussie’ (AUD) on Strong Uptrend Today as GBP/AUD Exchange Rate Slumps
Overnight the Australian Manufacturing PMI printed at a decided improvement, rising from 51.7 to 52.1, to signal a pick-up in domestic output. As Chinese output also showed a minor increase on forecasts the ‘Aussie’ (AUD) has continued its bullish run, extending the losses of the GBP/AUD pairing this morning.
Earlier…
Although the UK Current Account revealed a significantly narrowed deficit today, the Pound (GBP) has failed to gain traction against the buoyant Australian Dollar (AUD).
Rising UK Mortgage Figures Boosted the GBP/AUD Currency Pair, ‘Aussie’ (AUD) Movement Driven by Fed Hike Bets
Tuesday saw a marked turnaround in fortunes for Sterling (GBP) as UK Mortgage Approvals and the CBI Reported Sales data proved decidedly superior to forecasts. Boding well for the health of the domestic economy and raising hopes for a nearer-term Bank of England (BoE) interest rate hike, this spurred the GBP/AUD exchange rate onto a strong uptrend which struck a daily best at 2.1847.
Sustained declines in the value of commodities substantially softened the ‘Aussie’ (AUD) in the early week as copper fell to a monthly-low and the other base metals followed a similar suit. Nevertheless, the antipodean currency benefitted from an increasingly unclear picture on the odds of the Federal Open Market Committee (FOMC) voting for a 2015 interest rate hike, as US data failed to provide conclusive support. As a result, markets experienced an increase in risk-appetite, seeing the GBP/AUD pairing slump to an overnight low of 2.1574.
Sterling (GBP) Weighed Down by Lower than Expected UK GDP Today as Australian Dollar (AUD) Strengthens
Positive momentum continued to elude the GBP/AUD conversion rate this morning, with the downwards revision of the second quarter UK Gross Domestic Product offering little encouragement to investors. Although the domestic Current Account was revealed to have narrowed by a greater degree than anticipated, clocking in at -16.8 billion Pounds rather than -22 billion, this was not sufficient fuel to raise Sterling against its Australian rival.
Improvement on the global stock markets, with commodity trader Glencore redeeming much of its recent losses, have kept the ‘Aussie’ on strong form today. This relatively bullish run comes in spite of August Building Approvals in the antipodean nation having fallen beyond forecast overnight, as the importance of wider economic developments trumps the somewhat dovish domestic data release.
GBP/AUD Exchange Rate Forecast: ‘Aussie’ Could Continue to Rise if Domestic Manufacturing Shows Improvement
Should tomorrow’s Australian Manufacturing PMI print positively the ‘Aussie’ could extend its gains, although a dovish result could easily return the currency to a general downtrend on lapsed sentiment. Upcoming Chinese data will also be of note to traders, as further indications of economic contraction within the world’s second largest economy and major commodity consumer will likely pull down the antipodean currency.
UK Manufacturing and Construction PMIs could rally the Pound ahead of the weekend, as hawks look for support to the possibility of the BoE moving up their schedule for an interest rate hike. Continued disappointment, on the other hand, stands to see demand for Sterling remain decidedly soft.
Current GBP, AUD Exchange Rates
At time of writing, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.1592, while the Australian Dollar to Pound Sterling (AUD/GBP) pairing was holding gains at 0.4630.
Comments are closed.