Pound Sterling To Australian Dollar Forecast: 'Brexit' Continues To Impact GBP/AUD Trend

Published: 20 Oct 2017 21:24 Currency Markets Forex

pound to australian dollar exchange rate

The latest Pound Sterling to Australian Dollar rate (GBP/AUD) remains firmly stuck around its 50 per cent line of the previous two months trading on FX markets.

The British Pound (GBP) is under pressure through a combination of the political uncertainty that has arisen through the Brexit arguments and Prime Minister David Cameron’s suggestion at the turn of the year that the ‘in / out’ referendum could be held as early as this summer instead of the previously though 2017.

Other factors weighing on the GBP/AUD exchange rate include poor UK economic data as well as last week’s Dovish Bank of England monetary policy announcement which all but guarantees a ‘no-change’ policy from the Bank until next year.

In fact, newest policymaker Gertjan Vlieghe has suggested that the UK would have benefitted from negative interest rates following the 2008 financial crash.

Here are the latest FX rates for your reference:

On Thursday the Pound to British Pound exchange rate (GBP/GBP) converts at 1

FX markets see the pound vs pound exchange rate converting at 1.

Today finds the pound to euro spot exchange rate priced at 1.17.

The live inter-bank GBP-NZD spot rate is quoted as 2.114 today.

The pound conversion rate (against pound) is quoted at 1 GBP/GBP.

NB: the forex rates mentioned above, revised as of 28th Mar 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.

Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Outlook Today

Later on today we have the latest British inflation data.

Given that oil prices are now at a twelve year low at barely USD $28 a barrel, it is more likely than not that the period of deflation that has struck the UK economy of late is likely to continue for some time to come and with no inflationary pressures coming through the economy, there seems little reason for the Bank of England to be put under any pressure whatsoever to raise UK interest rates for the first time since they were lowered to their all-time record low of just 0.5% in March 2009.

australian dollar to pound sterling exchange rate

Slowing Chinese Growth weighs on Australian Dollar to NZD, USD, EUR Exchange Rate

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On the other hand, the Aussie remains under pressure, mainly due to the marked slowdown in its biggest trading partner, China and the sharp fall in world commodity prices experienced over the last six months. Overnight, the latest economic data out of China showed that economic growth in the world’s second largest economy has slowed to a rate of 6.9% in the last quarter of 2015, the slowest rate of growth since 1990.

Domestically, the Australian economy continues to fare little better with the latest ANZ-Roy Morgan consumer confidence index falling by 0.8% in the week ending 17 January as persistent worries over the slowdown in the Chinese economy and international stock market jitters continue to trouble Australian consumers.

Australian Dollar Predictions: AUD Exchange Rate Could Soften if RBA Cuts Rates

A growing number of analysts are now suggesting that the Reserve Bank of Australia (RBA) may look at a further cut in Australian interest rates, already at their all-time record low of 2% set in May 2015 if commodity prices don’t stabilise in the next few months.

In the meantime, both Sterling and the Aussie continue to trade under pressure around the 50% trading line of the last two months. We await a break-out from either side to see some new movement in this conversion rate.

With much of this week's major data for both the UK and Australia published, investors will be looking ahead to next week and the release of Australia's Consumer Price Index and the UK's fourth quarter growth data.

New Zealand Dollar Exchange Rate Forecast to Fall vs USD According to Westpac

According to Westpac analysts, the NZ dollar is forecast to suffer further losses in their near-term outlook:

"Falling NZ commodity prices tend to put downward pressure on the NZ dollar. And that’s certainly been the case over the last few weeks."

"The NZD/USD has fallen 4 cents from where it started the year back at 0.6886 to around 0.6450 as we write."

"Looking ahead we expect the NZ dollar to fall further over the coming months. We’re forecasting a fall to around 0.62 by the middle of the year."

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