The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has risen considerably today, and the Pound has also gained against all of its rivals.
Pound Smashes ‘Aussie’ as UK Inflation Rate Increases
The Pound Sterling (GBP) has risen by 1% against the Australian Dollar (GBP/AUD) today, after the UK annual CPI figure for July showed an unexpected 0.1% increase. As small as this growth was, it triggered a wide upsurge for the Pound, given the now linked concepts of a rising UK inflation rate equalling a rising chance of a UK interest rate hike.
Earlier…
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has climbed today after the minutes of the Reserve Bank of Australia’s (RBA) last meeting were released earlier.
Pound Stands to Trounce ‘Aussie’ if Unexpected UK Inflation Rise Occurs
The Pound (GBP) has gained by 0.5% against the Australian Dollar (GBP/AUD) today, between the RBA minutes being released and the impending announcement of the UK CPI figures for July.
The ‘Aussie’ (AUD), meanwhile, was harmed in the short-term by the contents of the RBA minutes. They reported that while mining activity had slowed due to the commodity crisis, the non-mining sectors of Australia had failed to pick up the slack in its place. Although the minutes showed broad optimism for Australia’s economic future, the RBA didn’t foresee any dramatic bursts of recovery, and it is for this reason that the Australian Dollar has fallen across the board today.
Earlier…
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has trended in a narrow range today as Bank of England (BoE) Monetary Policy Committee (MPC) member Kristin Forbes warned against delaying a UK interest rate increase for too long.
GBP/AUD News: Forbes’ Message has Varied Impact on Pound’s Performance
The Pound Sterling (GBP) has trended narrowly against the Australian Dollar (GBP/AUD) today as a warning from Forbes came ahead of tomorrow’s Consumer Price Indices for July. The article from Forbes was critical of an extended delay in a UK interest rate hike, and advised that such a rate hike needed to occur ‘well before’ UK inflation reaches the BoE target of 2%. In the article published on Saturday, Forbes wrote that ‘maintaining interest rates at the current low levels during an expansion risks creating distortions’. Despite these ill omens, Forbes’ article increased confidence in the Pound by the simple virtue that a UK increase rate increase taking place in the future has been implied.
The Pound rose by 0.3% against the Indian Rupee (GBP/INR) today and saw greater gains of 0.6% against the Israeli New Shekel (GBP/ILS) and the South African Rand (GBP/ZAR). The greatest gain for Sterling today has been a 1.1% advance against the Russian Ruble (GBP/RUB).
AUD to GBP Exchange Rate Drops amid Future Export Concerns
The Australian Dollar (AUD) has had a mixed performance today, trending in a narrow range against the Pound Sterling (AUD/GBP), rising by 0.3% against the Canadian Dollar (AUD/CAD) and falling by -0.3% against the Chinese Yuan (AUD/CNY).
The ‘Aussie’ has continued to be hit by the drop in demand for mining exports from China, as well as the overall declines in the price of gold and iron ore. A paper by Capital Economics, a global economic research company, suggested that the Services sector is a likely contender to fill the void left by the troubled Australian mining industry. This is an echo of last week’s speech by Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent, who observed this gap-filling movement by the Services industry by saying ‘The decline in the exchange rate has encouraged Australians and foreigners to direct more of their spending to Australian tourism, education and business services’.
GBP/AUD Exchange Rate Forecast: UK Inflation figures may trigger Sterling Rally
The Pound (GBP) is sure to be affected by the Consumer Price Indices released tomorrow; given the content of Forbes’ article, it seems that any movement in UK inflation towards 2% will increase speculation towards a UK interest rate increase. The forecast is for a 0.9% core figure but a non-core result of 0.0% due to a monthly decline of -0.3% so a Pound uptrend is unlikely unless the data surprises expectations.
For the Australian Dollar (AUD), the RBA Meeting Minutes for August are likely to be the deciding factor in its performance, as hawkish remarks by the RBA will be ‘Aussie’ positive but given the Chinese Yuan (CNY) situation last week, the positive impact of the minutes may be limited.
Current GBP, AUD Exchange Rates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending in the region of 2.1251 and the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.4707 today.
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