Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Trending Lower on Chinese Factory Output
Despite a slightly dovish tone to the minutes from the Reserve Bank of Australia’s most recent policy meeting, the ‘Aussie’ (AUD) has gained against most of its major peers after Chinese Industrial Production exceeded expectations. Sterling, meanwhile, has softened after public finances data showed a huge increase in public borrowing.
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The Pound Sterling to Australian Dollar exchange rate is currently trending in the region of 1.8341.
On Monday the Pound made significant gains against its most traded counterparts after house price data showed a marked increase in October. Rightmove House Prices ascended from 0.9% to 2.6%.
After a plan to inject liquidity by the People’s Bank of China was leaked to the press, the Australian Dollar strengthened against many of its major peers. ‘The new injection, if confirmed, is aimed at propping up lending to support the economy,’ Xu Gao, chief economist at China Everbright Securities Co, told the Global Times on Sunday.
The Pound Sterling to Australian Dollar exchange rate has dropped to a low today of 1.8330.
Tuesday has seen Sterling depreciate against nearly all of its most traded currency rivals after public finances data produced unfortunate results. Public Finances rose exponentially from 1.9 billion to 17.7 billion and Public Sector Net Borrowing increased from 10.7 billion to 11.1 billion.
In addition to the poor British data, further declination can be attributed to negative sentiment towards the Bank of England after the payments system was called into question. BoE Governor Mark Carney came under fire after a nine-hour system failure caused a delay to bank transfers.
Simone Giansante, a lecturer in finance at the University of Bath, England, stated; ‘It’s something that shouldn’t happen, you can imagine how many billions are settled every hour. It’s something unbelievable, especially in the UK’
The Australian Dollar gained momentum on Tuesday after Chinese factory output increased beyond expectations. Chinese Industrial Production eclipsed the median market forecast of a rise from 6.9% to 7.5%, with the actual result reaching 8.0%.
The improvement in Chinese industrial production has overshadowed the minutes from the Reserve Bank of Australia’s most recent policy meeting, which contained dovish overtones. The RBA officials stressed their fears over the continued rise in domestic unemployment despite their best efforts to curb the trend. The RBA’s board concluded that ‘it would probably be some time before the unemployment rate declined consistently’.
Pound Sterling to Australian Dollar; Volatility Forecast
On Wednesday there will be several data releases which could have a marked effect on the GBP/AUD exchange rate.
The Australian Consumer Price Index is very likely to spark changes for the South Pacific currency and is forecast to decline.
For those invested in the Pound the publication of the minutes from the most recent BoE policy meeting will be of interest. With global economic disparity at the forefront of traders’ minds, it will be interesting to see if there are any dissenters from Carney’s policy outlook.