Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Edge Higher on Damp Market Sentiment
GBP/AUD Exchange Rate Predicted to Tick Higher after UK Construction Output Bettered Estimates
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate edged fractionally higher by around 0.2% on Tuesday afternoon.
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In response to better-than-expected domestic data, the British Pound advanced versus the Australian Dollar. However, Sterling fluctuated versus its major peers amid concern that retail giant Next’s disappointing sales report for the holiday season will see many high street stores follow suit. December’s UK Construction PMI was forecast to rise from 55.3 to 56, but the actual result eclipsed the market consensus reaching 57.8. This eased some tensions regarding muted sectoral growth in the fourth-quarter.
Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, said: ‘UK construction companies finished 2015 in a positive fashion, as overall output growth recovered from November’s seven-month low. Commercial building was the main engine of growth, with this area of activity expanding at the strongest pace since autumn 2014. There was also a rebound in house building activity in December, but momentum was still much softer than the post-crisis highs achieved during 2014.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.0517.
AUD/GBP Conversion Rate Predicted to Hold Losses on Trader Risk-Aversion
With trader risk-appetite still damp following yesterday’s less-than-ideal Chinese manufacturing print, demand for the Australian Dollar cooled on Tuesday. However, the ‘Aussie’ (AUD) recovered a little thanks to intervention from the People’s Bank of China (PBoC). China’s central bank used state-controlled funds to shore up dwindling stock values.
However, many fear that this intervention is just a stop-gap and doesn’t address rooted issues. ‘We don’t really like market intervention,’ said Stephen Ma, a Hong Kong-based senior portfolio manager at LGM Investments Ltd. ‘The government should have learned their lesson last summer.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 2.0392 during Tuesday’s European session.
Pound Sterling to Australian Dollar Forecast: Services Data to Provoke Volatility
Given the absence of further domestic data pertaining to either the UK or Australia, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold gains for the remainder of Tuesday’s European session. Later during the Australasian session the GBP/AUD exchange rate is likely to see changes in response to Australia’s Performance of Service Index. On Wednesday, the Pound will see movement in response to the Services and Composite PMIs.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate climbed to a high of 2.0534 during Tuesday’s European session.