The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate softened by around -0.31% on Tuesday afternoon.
Despite the fact that British economic data printed relatively positively on Tuesday, the Pound softened versus many of its currency rivals. The depreciation can be linked to a HSBC announcing significant jobs cuts and the potential to move the headquarters away from the UK.
The Australian Dollar, meanwhile, advanced versus many of its currency rivals thanks to a combination of rising gold and iron ore prices. The appreciation was somewhat sluggish, however, thanks to disappointing inflation data out of China.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 1.9896.
Pound Sterling (GBP) Exchange Rate Forecast to Soften against the ‘Aussie’ (AUD) as HSBC Prepares to Cut Jobs
British trade data printed positively on Tuesday. April’s Visible Trade Balance, Trade Balance Non EU and Total Trade Balance saw the trade deficit narrow on all counts. ‘Although the near-term outlook for the external sector does not look fantastic, at least net trade this quarter looks unlikely to repeat the first quarter’s big negative contribution to overall GDP growth,’ said Vicky Redwood, chief UK economist at Capital Economics.
However, the Pound softened versus most of its peers thanks to news from Europe’s largest bank, HSBC, that around 25,000 jobs will be cut globally with around 8,000 slashed in the UK. In addition, speculation mounted that the bank will opt to relocate its headquarters from London as UK regulations, imposed after the financial crash, unveiled many scandals within the institution.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 1.9850 today.
Australian Dollar (AUD) Exchange Rate Forecast to Strengthen against the UK Asset despite Poor Chinese Data
In the early stages of the European session, the Australian Dollar was trending lower versus many of its peers. The depreciation was the result of disappointing inflation data out of the world’s second most powerful economy. On the Year, China’s Consumer Price Index dropped from 1.5% to 1.2% in May, dropping beyond the median market forecast of 1.3%. May’s Producer Price Index held at -4.6% annually, failing to meet with the market consensus of a fractional rise to -4.5%.
Although Australian economic data printed relatively positively, the ‘Aussie’ rally in the latter half of the European session can be attributed to rising gold and iron ore prices. ‘There is a general nervous tone to markets today that is favourable for gold,’ said Bill O’Neill, a broker at Logic Advisors. ‘In our view, prices should remain well supported at current levels until better performance from the major iron ore exporters compensates for a disappointing couple of months,’ said analyst Christian Lelong in a report.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Hold Losses on Lack of Data
Given the absence of further domestic data publications, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold losses for the remainder of Tuesday’s European session. Wednesday will see GBP/AUD volatility with British Industrial Production, Manufacturing Production and Gross Domestic Product Estimate due for publication.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate advanced to a high of 2.0017 today.
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