Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Edge Lower ahead of UK Growth Data
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate softened by around -0.25% on Tuesday morning.
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With the decline in oil prices slowing, trader risk sentiment improved slightly. This saw heightened demand for the higher-yielding ‘Aussie’ (AUD). A slight improvement in Business Confidence also aided the ‘Aussie’ uptrend, although a fractional declination in Business Conditions stymied gains.
The Pound Sterling, meanwhile, is generally holding steady versus most of its major peers as traders await British growth data.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 1.8993.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate edged higher by around 0.15% on Monday afternoon.
Bank of England official, Kristin Forbes, made comments regarding the possibility that rates will rise sooner-than-expected, causing the Pound to strengthen versus most of its major peers. Further appreciation can be attributed to lower oil prices acting like a tax cut and amplifying consumer spending.
The Australian Dollar, meanwhile, fluctuated against its major peers on Monday as it tracked volatility in the commodities market. Oil prices have dampened risk sentiment and caused the ‘Aussie’ (AUD) to decline versus most of its currency rivals. However, demand for gold saw the ‘Aussie’ regain some of its losses.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 1.8982.
Pound Sterling (GBP) Exchange Rate Gains on Hawkish BoE Interest Rate Remarks
The latest move by the European Central Bank (ECB), in which they plan to inject €1.1 trillion into the Eurozone, has been positive for the Pound. With the British economy struggling while its closest trading partner battled against recession, the ECB’s quantitative easing could see improvement in the Eurozone, which will be positive for the UK.
After BoE policymaker Kristin Forbes stated that improvement in both the domestic and global economies has the potential to prompt a rate hike sooner than anticipated, the Pound strengthened against most of its major competitors. Forbes said that she expects a ‘higher probability’ of scenarios in which inflation continues to fall before picking up more strongly than expected.
‘These scenarios, if they occur, would imply an earlier increase in interest rates than currently expected, especially in order to ensure that any subsequent interest rate increases are slow and gradual,’ she said in a speech published on Monday.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low today of 1.9062.
Australian Dollar (AUD) Exchange Rate Fluctuates on Commodities
As discussed earlier, the fall in oil prices coincided with an ‘Aussie’ decline as dampened risk sentiment spurred demand for safe-haven assets. The high-yielding Australian Dollar harbours too much risk whilst geopolitical uncertainties dominate trader focus.
However, the heightened demand for safe-haven assets triggered a surge in gold prices. With higher gold prices supporting the Australian economy, the ‘Aussie’ recovered earlier losses. A renewed declination, albeit fractional, can be attributed to traders buying profits after the surge in gold opened up some attractive selling positions.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Edge Higher
As traders sell their gold positions to capitalise on increased demand amid cautious trading, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to edge higher for the remainder of Monday.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate reached a high today of 1.9062.