Pound Sterling (GBP) Exchange Rate Forecast to Strengthen against the ‘Aussie’ (AUD) on Positive UK Data
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate advanced by around 0.4% on Friday morning.
British economic data printed positively on Friday but the UK asset declined versus the majority of its most traded currency peers. The second estimates for second-quarter British Gross Domestic Product met with median market forecasts on both a quarterly and an annual basis. Quarterly Business Investment exceeded expectations of 1.7% growth in the second-quarter, with the actual result reaching 2.9%. Additionally, the GfK Consumer Confidence Survey bettered estimates for August; rising from 4 to 7.
The Sterling depreciation can be linked to speculation that the fallout from China’s economic slowdown will have negative ramifications for the Bank of England’s (BoE) policy outlook. With economic growth becoming increasingly divergent across the globe, many traders have now pushed back bets as to the timing of a BoE rate hike from the first-quarter of 2016 to the third-quarter.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.1567.
‘Aussie’ (AUD) Forecast to Tick Lower against the British Pound (GBP) on US Dollar Strength
Now that the market has settled following days of readjustment from the chaos of ‘Black Monday’, the commodity-correlated asset rally has tailed off. Market sentiment has edged towards risk-aversion as traders contemplate the lasting impact of China’s economic slowdown on global markets. Also weighing on demand for the Australian Dollar was disappointing data out of China. China’s Industrial Profits contracted by -2.9% in July on the year, further highlighting the Far East nation’s economic struggles.
In addition to damp market sentiment and disappointing data out of China, the South Pacific asset softened in response to US Dollar strength. US second-quarter growth bettered estimates, Augusts’ Consumer Confidence trumped expectations and Durable Goods Orders for July came in higher-than-anticipated. This caused the US Dollar to advance despite delayed bets regarding the timing of a Federal Reserve rate hike.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 2.1397 today.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Hold Steady ahead of US Data
Given the absence of further economic data pertaining to either the UK or Australia to provoke changes, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold steady for the remainder of Friday’s European session. With that being said, US data could provoke changes for the Australian Dollar on Friday afternoon.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate reached a high of 2.1571 during Friday’s European session.
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