GBP/AUD Conversion Rate Predicted to Dive after UK Manufacturing Missed Estimates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate softened by around -1.1% on Tuesday afternoon.
Although the solitary British economic data publication today produced a disappointing result, the Pound managed to hold modest gains versus the majority of its currency rivals. The fractional appreciation can be attributed to a positive outcome from Bank of England (BoE) stress tests which were designed to check how the seven major British banking institutions would cope in another recession. Whilst all seven banks passed the tests, RBS and Standard Chartered need to work harder to completely satisfy regulators.
November’s UK Manufacturing PMI was predicted to drop from 55.2 to 53.6, but the actual result tumbled to 52.7. Whilst the data failed to meet with expectations, analysts still consider manufacturing output to be robust. David Noble, Group Chief Executive Officer at the Chartered Institute of Procurement & Supply, stated; ‘Market forces continued to be strong, although at a softer and less robust pace than last month, as purchasing activity continued along its upward trend. Buoyed up by continued falls in commodity prices and a steady rise in new export orders and improved domestic demand, once again larger companies took advantage of these ripe conditions following last month’s trend.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.0586.
AUD/GBP Conversion Rate Predicted to Trend Higher on US Dollar Weakness
In spite of the fact that Chinese manufacturing output missed estimates and remained in contraction territory, the Australian Dollar strengthened versus its currency peers. Whilst many analysts agree that poor Chinese manufacturing output will hurt the Australian economy, the disappointing data is having a detrimental impact on the US Dollar in the short-term. This is due to concerns that the current emerging-market slowdown will cause Federal Reserve policymakers to err on the side of caution.
The ‘Aussie’ (AUD) also found support today after the Reserve Bank of Australia (RBA) opted to hold the cash rate. Whilst this was not a particular surprise to economists, Governor Glenn Stevens’ accompanying press conference was more hawkish than anticipated. Stevens stated that he was pleased with the current economic progress despite previous targets not being met. Stevens did, however, leave the door open for further stimulus in 2016 should it prove necessary.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 2.0601 today.
GBP/AUD Exchange Rate Forecast to Hold Losses after US Manufacturing Contracted
Data published during Tuesday’s North American session saw US ISM Manufacturing output unexpectedly contract in November. This caused the US Dollar to dive which supported demand for the South Pacific currency. Therefore, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is very likely to hold losses for the remainder of Tuesday’s trade. Wednesday’s Australasian session will see ‘Aussie’ volatility in response to third-quarter Gross Domestic Product data. The Pound, meanwhile, will see movement in response to November’s Construction PMI.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate reached a high of 2.0832 during Tuesday’s European session.
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