Australian Dollar Pound Exchange Rate Rallies as Iron Ore Costs Keep AUD Buoyant
The Australian Dollar Pound exchange rate has been highly favourable today, with commodity costs cementing the AUD GBP lead.
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The Pound’s latest source of woe has been Malta, which has shut down hopes of the UK pulling off the impossible in Brexit negotiations.
Rally Recorded for Australian Dollar Pound Exchange Rate on Latest Iron Ore Prices
The Australian Dollar has been able to make steady gains against the Pound during trading today, mainly on account of the latest positive shifts in the price of iron ore.
The cost of iron ore has been volatile but generally supportive to the AUD recently; economists and analysts alike have been trying to explain this movement.
Among these has been Commonwealth Bank Mining and Energy Analyst Vivek Dhar, who has hypothesised that;
‘Stronger steel prices spurred iron ore buying. Restocking demand for medium and higher grade ores helped prices higher too. Higher grade ores allows steel mills to limit their coke usage, which means a smaller exposure to high coking coal costs’.
On the Pound’s side, Sterling has slumped against the Australian Dollar, owing to the latest concerns about the UK facing ‘Hard Brexit’.
The latest source of concern has been the smallest EU member state – Malta. Speaking on Friday, Maltese PM Joseph Muscat stated that the UK would not be able to stay in the single market without free movement of EU citizens to the nation; this plan had previously been floated by the UK Government.
AUD GBP Exchange Rate Gains Possible on Incoming Manufacturing and Permits Stats
Next week’s Australian data releases could well bolster the Australian Dollar against the Pound, given that forecasts have been optimistic for two impactful announcements.
On Wednesday, the October building permits result is forecast to rise out of a negative range, while the November AiG manufacturing index has an advance from 50.9 to 53.8 predicted.
Closing off the week on Friday will be the October retail sales result, which is forecast to dip from 0.6% to 0.13%.
GBP AUD Predicted to Soften if November PMI Printings Dip
The UK has three major announcements due over the coming week, two of which are currently forecast positively.
Stretching from Wednesday to Friday, the UK’s GfK consumer confidence and Markit manufacturing and construction PMI results will be announced. As it stands, the confidence figure has a shift expected from -3 to -1.
A similar positive is expected from the construction PMI, although if this drops along with the manufacturing result, then the GBP AUD exchange rate may dive. Both PMI figures are currently close to the neutral line of 50 points and a drop close to or into the contraction range is likely to resurrect prior concerns about the negative impacts of Brexit.
Recent Interbank Exchange Rates
At the time of writing, the Australian Dollar Pound (AUD GBP) exchange rate was trending in the region of 0.59 and the Pound Australian Dollar (GBP AUD) exchange rate was trending in the region of 1.67.