Pound Sterling (GBP) Exchange Rate Dives against the ‘Aussie’ (AUD) despite Positive UK Data
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate declined by around -1.3% on Wednesday afternoon.
With traders still struggling to adjust the currency market after the chaos that ensued over ‘Black Monday’, many assets have seen heightened volatility. Traders are still avoiding currencies with a deep connection to China and with the need to store money in a safer asset with a better return, the Pound has been many traders currency of choice. As a result, the British asset rallied versus many of its currency competitors.
Wednesday’s European session has seen the Pound continue to strengthen against many of its peers. The appreciation was aided by domestic data which showed Mortgage Approvals rose in July. BBA Loans for House Purchase was forecast to rise from 44488 to 46000, but the actual result reached 46033.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.1817.
Australian Dollar (AUD) Exchange Rate Rallies against the UK Asset (GBP) as Traders Readjust Market Positions
In the immediate aftermath of China’s equity market crash, commodity-correlated currencies dived significantly. In the following days traders have reacted by taking advantage of weak currencies. This has caused assets such as the ‘Aussie’ (AUD) to rally versus their major peers. Although still holding a comparatively weak position, the Oceanic currency continues to advance irrespective of weakness in the commodities market.
Once the ‘Aussie’ has settled into a position traders are comfortable with, there is a high chance that the asset will resume bearishness. With mounting uncertainties regarding China’s economic outlook, commodity prices continuing to trend lower and renewed hopes regarding a Federal Reserve rate hike in 2015; there is little to support ‘Aussie’ gains.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 2.1812.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Hold Losses whilst Market Settles
With an absence of further domestic data publications to provoke changes and with traders working to readjust the currency market to appropriate levels, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold losses for the remainder of Wednesday’s trade. Should US Durable Goods Orders print positively, however, the Australian Dollar may begin to decline if rate hawks reignite speculation of a September Federal Reserve rate liftoff.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate climbed to a high of 2.2122 during Wednesday’s European session.
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