Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Weakens
Despite a less-than-impressive construction, data publication the ‘Aussie’ (AUD) has trended higher versus the Pound. This is most likely to be as a result of waning demand for the US Dollar.
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Last week was particularly topsy-turvy from a British economic perspective, and Sterling mirrored the irregularity having had both bullish runs and record lows within short succession. The week ended negatively for the Pound however following lower-than-anticipated retail sales growth. With a distinct dearth of domestic data, pertaining to the UK, there has been little chance of recovery from last week’s disappointing end.
In general, the ‘Aussie’ has trended higher against the majority of its major peers over the past week. The positive surge was ignited by Reserve Bank of Australia Governor Glenn Stevens, who assured the Australian Parliament that he is not willing to lower interest rates in order to bolster the Australian economy.
On Wednesday the Pound to ‘Aussie’ exchange rate has softened. Demand for Sterling has waned whilst the Scottish bid for independence provides more questions than answers. The hangover from last week’s set of disappointing Eurozone domestic data publications has been extenuated due to a lack of data to provoke movement.
The Australian Dollar has strengthened versus many of the majors despite having had a less-than-desirable result for the Construction Work Done data. Having been forecast to have retracted by -0.5%, those backing the ‘Aussie’ would have been disappointed to see the actual result as a retraction of -1.2%.
The latest ‘Aussie’ surge can be attributed to a couple of factors. The first is the recent bearish New Zealand Dollar which has helped to boost the demand for the Australian Dollar. The second, and perhaps more current, reason for the strength of the ‘Aussie’ is the softening of the US Dollar. The bullish ‘Greenback’
(USD) has topped the charts in the past few weeks and most of its major peers had softened in response. The Australian Dollar was one of the few currencies to have dodged the throwback from a surging US Dollar. However, despite dodging the negatives from the strength of the ‘Greenback’, the Australian Dollar has benefited from the softening.
The Pound Sterling to Australian Dollar exchange rate has hit a low today of 1.7730.
Forecast for the Pound Sterling to Australian Dollar Exchange Rate
Thursday’s UK Consumer Confidence Survey will be of interest from a British economic perspective. Those backing the Pound will be hoping for a positive result to reverse Sterling’s current bearish behaviour.
Thursday will also be of interest to those invested in the Australian Dollar. The Monthly HIA New Home Sales data is important as an increase in home sales suggests a growing housing market which tends to promote the rest of the economy.
The Pound to Australian Dollar exchange rate weakened on Thursday as better-than-forecast business investment data out of the ‘Land Down Under’ supported the ‘Aussie’.
The ‘Aussie’ strengthened against all of its major peers after a report showed that planned spending by companies operating in Australia climbed more than expected in the second quarter of the year. Against the US Dollar, the Australian Dollar advanced to its highest level in three weeks.
The second quarter private new capex (capital expenditure) data showed a gain of 1.1%, compared to an expected 0.3% quarter-on-quarter fall.
Sterling meanwhile remains under pressure from mounting uncertainty over the vote for Scottish Independence. With the rhetoric of both the Yes and No campaigns, growing increasingly aggressive demand for the currency by traders has eased.
‘The Pound Sterling has had less to celebrate this week having had very few domestic data publications to divert the current downward trend. As the Scottish bid for independence continues to rouse debate without any clear direction, sentiment towards the Pound has waned considerably,’ said Ollie Carpenter from Future Currency Forecast.
Market focus is now fixed on events in the Eurozone and USA. Economists are widely expecting that Thursday’s string of US reports will show that the world’s largest economy is still facing headwinds.
The ‘Greenback’ softened against all 16 of its major peers as investors embarked on a round of profit taking ahead of the afternoon’s data releases.