Pound Sterling (GBP) Exchange Rates Outperform Currency Rivals, UK Services Back to Growth, Fears of Recession in 2016-2017
With risk appetite still high the Australian Dollar struggled to trend higher on the back of August’s NAB Business Confidence Index, despite the measure strengthening.
However, the GBP/AUD exchange rate soon returned to a downtrend thanks to the UK’s latest inflation data, which showed that higher import prices were failing to feed through into the wider economy.
The GBP/AUD continued to trend strongly on Monday afternoon, with the Aussie dollar undermined by a lack of demand for risk-correlated currencies.
Tuesday’s Asian session will see the publication of the NAB’s August Australian business confidence report, which scored 4 in July. This will be followed by Britain’s latest inflation results during the European session.
Demand for the Australian Dollar (AUD) was not boosted by the news that domestic credit card purchases had weakened in July, something which seems to point towards softer consumer confidence.
The appeal of the commodity-correlated currency was also dented as copper and iron ore prices both fell to their lowest levels since June, with risk aversion helping to buoy the Pound to Australian Dollar exchange rate on Monday
Sending large amounts of money abroad? Did you know you could save compared to using the high street banks? Get a free guide and start a chat with our team of foreign exchange experts.
Latest Pound/Australian Dollar Exchange Rates
BoE Forecast to Freeze Interest Rate at 0.25%, Dovish Comments Could Send GBP/AUD Exchange Rate Lower
The Pound to Australian Dollar (GBP/AUD) exchange rate may move as the result of a variety of factors in the week ahead, leading up to the high-impact Bank of England (BoE) interest rate decision on Thursday.
Tuesday will bring the August inflation rate result, which is forecast to rise on the month, while Wednesday is expected to see the July unemployment rate rise from 4.9% to 5%.
The BoE is not expected to touch the historically low interest rate on Thursday, but any signs of division among policymakers is likely to raise hopes that a rate hike could take place in the face of the manufacturing and services PMI rebound back into growth in August.
Australian Dollar (AUD) Exchange Rates End Week After Aussie Homes Data
The Australian Dollar (AUD) closed trading last week on a low note, due to Friday’s Australian home loans and investment lending for homes results falling in July.
Earlier on in the week, the Reserve Bank of Australia (RBA) made no change to the current interest rate at 1.5%, which raised the appeal of the ‘Aussie’ considerably, owing to further signs from the central bank that further rate adjustments were not likely in the near-term.
Although the AiG construction index fell from 51.6 to 46.6 on Wednesday, the fact that the Q2 GDP growth rate was positive sent the Australian Dollar soaring, as it indicated that the country had been in continuous economic growth without recession for 25 years.
Australian Dollar (AUD) Exchange Rate Gains Possible on NAB Confidence and RBA Bulletin
The ‘Aussie’ may fare well against the Pound on Tuesday, as the NAB business confidence result for August has been forecast to rise from 4 points to 6.
Less positively, Wednesday’s Westpac consumer confidence index for September is forecast to decline, while Thursday’s unemployment rate is expected to rise from 5.7% to 5.9%.
Throughout the week, speeches are expected from RBA officials, including from Christopher Kent, Guy Debelle and Tony Richards. The RBA’s bulleting is also due on Thursday.
Historic 100 Quarters of Growth Raised Australian Optimism, Is Australia's Economic Outlook Bright?
Economists and investors alike were in celebration on Wednesday last week, when the Australian GDP growth rate figures showed that the nation had not been in recession for 25 years in a row.
Responding cautiously to the news was University of Newcastle Professor of Economics Bill Mitchell, who said;
‘The private investment is in a state of collapse, our external sector, our export sector basically went backwards this quarter, and the only thing that kept growth above zero was the public sector. It's still growing but it's slowing down because households carry on massive debt loads and will not drive growth to the levels that we saw prior to the Global Financial Crisis’.
The GBP to AUD exchange rate converts at 1.942 today.
The GBP to EUR exchange rate converts at 1.17 today.
The GBP to USD exchange rate converts at 1.243 today.