As this week’s session gets underway, the recent mini-revival for GBP AUD looks to be running out of steam, with the pair still residing in the 1.5200s.
Foreign Currency Market Update – GBP / AUD Update
The Pound has continued its recent renaissance against the Australian Dollar during the past week, sending the GBP AUD exchange rate all the way up to 1.5274 during last Friday’s session. This was the pair’s highest level since the middle part of July.
The move higher for GBP AUD came in spite of a relatively positive set of Reserve Bank of Australia minutes, released in the early hours of last Tuesday morning. The central bank commentary deemed Australia’s key lending rate of 3.5% appropriate for current economic conditions, scotching thoughts of a near-term trimming of interest rates which were harboured by a significant minority of institutional investors. The minutes went on to observe that there were signs that the recent drop-off in Chinese economic growth appeared to be ‘stabilising’. Further good news for the Aussie came when the RBA remarked on an apparent improvement in the non-mining sectors of Australia’s domestic economy.
The RBA’s comments provoked a brief visit back below the 1.5000 level for GBP AUD. However, renewed concerns from market participants over the eurozone’s debt crisis saw the pair retrace back up into the 1.5000s as the week progressed. These fears were fuelled by reports that Greece’s Prime Minister Antonis Samaras used his meeting with German Chancellor Angela Merkel to request ‘breathing space’ in order to assist the debt-ridden Hellenic state meet the terms of her bailout agreement. The subsequent shift out of risk-laden assets elicited concerted selling pressure on the Australian Dollar. The week ended with another boost for the pair thanks to a slight upward revision to the UK government’s official Q2 GDP growth figure.
As this week’s session gets underway, the recent mini-revival for GBP AUD looks to be running out of steam, with the pair still residing in the 1.5200s. However, data from China’s industrial sector, released during Monday’s Asian session, revealed that combined profit accrued by the Asian giant’s industries contracted for the fourth month in succession last month, bringing into question the RBA’s assertion that China’s economy was on the mend. If global appetite for risk continues to ease following this release, then GBP AUD could head back towards the mid-1.50s. However, if tomorrow’s US GDP figures for Q2 beat expectations, then the pair could head back down towards the mid-1.40s once more.
Summary of major upcoming data releases that we think may move the market.
- Pound to Australian Dollar Forecast: Sterling continued its recent dismal run against the Australian Dollar during last week’s session
- Pound to Australian Dollar Forecast: The Pound’s recent rally against the Australian Dollar is rapidly running out of steam
- Pound to Australian Dollar Forecast: The Sterling to Australian Dollar exchange rate continued to edge lower as last week’s session drew to a close
- Sterling has continued its march forward against the Kiwi Dollar in recent sessions
- The past seven days have seen Sterling buck its recent run of losses against the Australian Dollar