GBP to AUD and NZD Exchange Rate Forecast – NZ GDP in Focus
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate looks set to end the week trending more than 0.5% higher while the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is trading in a fairly narrow range.
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Overnight the Australian Dollar lost ground against its British counterpart as investors ditched higher-risk assets amid concerns that both the Federal Reserve and Bank of England are preparing to increase interest rates early next year.
The ‘Aussie’ was also feeling the heat as industry experts questioned the validity of Augusts’ employment figures. Although the data has been checked and is deemed to be accurate, some investors are dubious of the almost record-level employment surge.
Earlier in the week the Australian Dollar also sustained losses as a result of poor Australian Business Confidence/Conditions figures and a sharp decline in the rate of domestic consumer confidence. China’s slowing consumer prices also took a toll, as did the falling price of Australia’s main export, iron ore.
The Pound, meanwhile, was able to recover earlier losses as UK officials took a stand on the issue of Scottish independence and attempted to sway people into voting ‘no’ next week.
On Friday the Pound to Australian Dollar exchange rate managed to continue trending in a stronger position even as the UK’s Construction Output report showed unexpected stagnation in July. An increase of 0.6% had been anticipated.
The Australian Dollar was also trading in the region of a six-month low against the US Dollar as investors focused on next week’s Federal Open Market Committee policy meeting. The AUD/USD exchange rates bearishness prompted this response from strategist Stan Shamu; ‘The FOMC meeting takes place in the middle of next week and it seems the market is growing increasingly hawkish on the Fed. With quantitative easing due to wind down completely, the Fed is expected to flesh out some detail around the exit strategy and no doubt the debate around the Fed funds will continue.’
The Pound to Australian Dollar (GBP/AUD) exchange rate is currently trading in the region of 1.7942 and the USD/AUD exchange rate is currently trading in the region of 1.1044.
Although the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate began the week trading softly (thanks to the YouGov poll wiping out the Pound’s appeal) the British asset has staged a steady rebound over the course of the week.
The GBP/NZD exchange rate was able to advance in the wake of the Reserve Bank of New Zealand’s interest rate decision. The RBNZ kept interest rates on hold, as anticipated by economists, but the central bank also stressed that it wouldn’t be returning to its cycle of hiking interest rates for some time to come.
The surprisingly hawkish commentary caused widespread New Zealand Dollar declines.
However, the Pound to New Zealand Dollar exchange rate pared gains after New Zealand’s Performance of Manufacturing index impressed. The gauge rallied to 56.5 in August from a positively revised 53.5 in July, pushing further above the 50 mark separating growth from contraction. In the opinion of economist Doug Steel; ‘Today’s performance of manufacturing index, overall and in its detail, offers support to the idea that the manufacturing sector will bounce back from the Q2 softness before long. The combination of a solid lift in new orders and a drop in inventories is also a pointer to more production ahead.’
The report meant that the GBP/NZD pairing was only trending 0.1% higher on Friday in spite of a fresh YouGov poll giving unionists the lead in the Scottish referendum.
The Pound to New Zealand Dollar (GBP/NZD) exchange rate is currently trading in the region of 1.9872 and the NZD/USD exchange rate is currently trading in the region of 0.8178.
GBP/AUD Five-Day Forecast
Next week volatility in the Pound Sterling exchange rate could be caused by Australia’s Roy Morgan Consumer Confidence Index, a speech to be given by Chris Kent of the Reserve Bank of Australia in Sydney and Australia’s Westpac Leading Index. However, as the majority of these reports aren’t particularly influential, investors with an interest in the GBP/AUD pairing are more likely to be led by the week’s major UK developments – including the publication of minutes from the latest Bank of England policy meeting.
GBP/NZD Five Day Forecast
While UK news will be a big driver of Pound Sterling to New Zealand Dollar exchange rate movement next week, the GBP/NZD pairing is also forecast to fluctuate in response to some key economic data for New Zealand. The main reports to look out for include the nation’s Performance of Services index (due out on Sunday), New Zealand’s second quarter growth data (due out on Wednesday) and domestic consumer confidence figures, set for publication on Friday. If these fundamentals impress it may cause the RBNZ to reconsider pausing its rate-hiking cycle, which would push the New Zealand Dollar higher against the Pound.