The latest set of US Non-Farm Payrolls data in the US severely disappointed investors, printing well below expectations.
Foreign Currency Market Update – GBP / AUD Update
The GBP AUD exchange rate continued to drift downwards off its 3-month high of 1.5637, which it visited on 5th September, during last week’s session. There has been little in the way of significant Australian or UK data releases during the past seven days to shape market movement, so the shift lower looks, at least in part, to be driven by speculators taking profit at rates close to the top of the recent range.
However, last week did not pass without significant risk events taking place; perhaps the most anticipated announcement of recent months took place after the European equities close on Thursday, when the US Federal Reserve announced that it would be re-starting its Quantitative Easing programme. The American Central bank revealed that it would be pumping US$40bn of new funds into the money markets each month for an unspecified period of time, in an attempt to get global credit markets moving again. The announcement had the immediate effect of sending global share markets sharply higher – the risk-sensitive Australian Dollar was also well-supported following the Fed’s statement, taking the GBP AUD exchange rate down to its lowest level this month at 1.5279 on Friday afternoon.
Looking ahead to this week, the minutes of both the Reserve Bank of Australia and Bank of England’s most recent policy meetings are penned in for release in the early hours of tomorrow morning and Wednesday morning respectively. Recent rhetoric from the RBA’s Governor Glenn Stevens has been relatively positive, providing support for the Aussie Dollar. If the RBA’s commentary hints at burgeoning concerns that a slowdown in the Chinese economy and a downward move in wholesale iron ore prices may start hurting Australia’s economy, then the GBP AUD exchange rate could continue to recover from Friday’s downward move. Any suggestion from the BoE minutes that the Bank’s monetary policy committee is considering following the lead of its US counterpart in extending QE, would be highly likely to have the opposite effect.
Summary of major upcoming data releases that we think may move the market.
- Pound Sterling to Australian Dollar Foreign Currency Exchange Rate Forecast – Exchange rate hits 3 month high…
- Pound to Canadian Dollar Forecast: The GBP CAD exchange rate held below its 7-month high of 1.6206
- Pound to Australian Dollar Forecast: The Pound continued its downward trend
- Pound to Australian Dollar Forecast: The Pound reached a 2-week high against the Australian Dollar
- Pound to US Dollar Exchange Rate Forecast: Domestic strength in the UK economy has allowed Sterling to reach a 4-month high against the US Dollar