GBP to AUD Exchange Rate Declines Following Faltering UK Inflation Data
The Pound Sterling to Australian Dollar exchange rate is currently trending in the region of 1.7827, hitting a low of 1.7816 and a high of 1.7943. Movement at this time is around -0.62% which is likely to be a result of lower-than-expected UK inflation data.
If you're looking to make an international money transfer, we recommend TorFX.
Yesterday went some way towards recovery for the Pound after the horrific week preceding. Traders pulled away from Sterling last week when the dovish Bank of England (BoE) Inflation Report suggested a change in focus from unemployment to wage growth. This in turn all but quashed the speculation of an interest rate hike before the close of the year, as the lack of wage growth is likely to take some time to repair.
However, following an interview given by Bank of England Governor Mark Carney to the Sunday Times, Sterling shot up against most of its peers. In the interview Carney suggested that he would not necessarily wait for wages to increase before lifting the bank rate from its current record low of 0.5%. His reasoning behind this change of mind is unclear; but speculation is rife that it could be an attempt to ready markets ahead of this week’s publication of the BoE minutes report.
The data docket pertaining to Australia was very sparse yesterday. Movement was generally static in anticipation of the Reserve Bank of Australia (RBA) minutes due for publication early this morning. A fractional dip against many of its peers can be connected to waning consumer confidence as evidenced by a decline in new motor vehicle sales.
Today has seen a slight reversal in fortune for the Pound. UK year-on-year Consumer Price Index was expected to dip from 1.9% to 1.8%. The actual data revealed a drop to 1.6%. In a similarly disappointing vane the Retail Price Index was forecast to fall from 256.3 to 256.2. The actual data revealed a decline to 256.0.
Whilst this duo of disappointing data releases has had an immediate impact on Sterling, the severity of the softening is yet to be gauged. The GBP/AUD pairing fell by 0.6%, but declines could have been worse.
This morning the Reserve Bank of Australia released the minutes from its previous policy meeting. The minutes outlined the desire for a continuation of the low interest rate as the outlook of the economy is still uncertain. This dovish report would have ordinarily caused a severe softening of the currency but, given that it remained faithful to the comments issued immediately following the meeting, the ‘Aussie’ (AUD) has seen relatively little movement as a result. Perhaps another reason for this is outlined by Matthew Olney, writing for Future Currency Forecast, who states; ‘The report supported the ‘Aussie’ as it showed that the Central Bank […] issued no comments on the strength of the currency. The lack of talking down the currency was seen as positive for it and resulted in the Australian Dollar making gains against many of its most traded peers’.
The Pound Sterling to Australian Dollar exchange rate has hit a low today of 1.7816.
Forecast for the Pound to Australian Dollar Exchange Rate
Wednesday will be fairly quiet in terms of UK domestic data to be released. The Bank of England Minutes report will be of interest as many analysts speculate that at least one of the policymakers had opted for an earlier interest rate hike.
In terms of Australian domestic data, Wednesday’s RBA Governor Glen Stevens semi-annual testimony may affect movement for the ‘Aussie’. Mark Mulligan, writing for the Sydney Morning Herald, states; ‘Dollar watchers will be alert to any attempts by Mr Stevens to talk the currency down, and to any hints about the RBA’s next move on the cash rate’.
Thursday has a fairly heaped domestic data docket for both Sterling and the ‘Aussie’. Most of the Australian domestic data is low impact and is therefore unlikely to dictate movement. However, the Chinese manufacturing PMI will have an impact and is currently expected to drop from 51.7 to 51.5.
There are several influential UK data releases on Thursday. Year-on-year Retail sales is likely to impact on Sterling. It is forecast to drop from 4.0% to 3.5%. Those invested in the Pound may also wish to watch the Public Finances Report and the Public Sector Net Borrowing Report. The net borrowing figure is forecast for a massive declination from 9.5 billion to -1.7 billion. If the actual result stays true to the forecast figure it is very likely to boost the Pound against its peers.
The Pound Sterling to Australian Dollar exchange rate has hit a high today of 1.7943.