Pound to Australian Dollar Exchange Rate Forecast – The AUD came under further selling pressure in the middle part of last week

Pound to Austalian Dollar Exchange Rate Forecast - The AUD came under further selling pressure in the middle part of last weekThis week’s highlight is likely to be provided by the release of the RBA’s Bulletin in the early hours of Thursday morning.

Foreign Currency Market Update – GBP / AUD Update

Last week saw the GBP AUD exchange rate once again show signs of life, following its horror run of nine consecutive near-term weekly lows at the start of the year, which culminated in a new 27-year low in the middle part of February. Last Wednesday’s session saw the pair break to 1.4959, its highest level since 11th January, following the Reserve Bank of Australia’s interest rate decision. The announcement saw the RBA maintain its key cash rate at 4.25%, as expected. However, RBA Governor Glenn Stevens’ comments which followed, stating that his Bank would consider cutting its key lending rate later in the year if economic conditions merited such an action, hurt the Aussie. Analysts had expected Stevens to switch away from an easing bias, so his statement came as a surprise to investors. The AUD came under further selling pressure in the middle part of last week, as Greece struggled to convince its private investors to accept a ‘haircut’ on their holdings of Greek bonds. Fears that the requisite 75% of investors would not sign up to the debt swap deal by Thursday evening’s deadline saw appetite for risk drain from global markets, causing a shift out of assets with a high risk tariff. Weaker than anticipated domestic growth, employment and trade balance figures further suppressed the Aussie last week.

This week’s highlight is likely to be provided by the release of the RBA’s Bulletin in the early hours of Thursday morning. Given the negative tone of last week’s comments from Governor Stevens, the bulletin has the potential to trigger a renewed move out of the Australian Dollar, leaving the GBP AUD rate eyeing the 1.5000 level once again. However, caution is advisable, as even with last week’s slew of Aussie-negative risk events, the pair did not manage to break out of the 1.4000s, where it has been mired for two months now. If, as expected, eurozone Finance Ministers, meeting in Brussels today, confirm that Greece has qualified for its next €130bn tranche of bail-out funding, then ‘risk-on’ trading may return to global markets, pushing the Aussie higher and triggering a renewed run at the 27-year low of 1.4555 for GBP AUD.

Heads Up

Summary of major upcoming data releases that we think may move the market.

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