Both the Pound Sterling to Australian Dollar (GBP/AUD) and Pound Sterling to New Zealand Dollar exchange rates climbed on Thursday.
The GBP/AUD exchange rate rallied during the Australasian session after Reserve Bank of Australia Governor Glenn Stevens indicated that the central bank was contemplating taking action to cool the domestic housing market.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate hit a high of 1.8581
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate hit a high of 2.0596
Meanwhile, the GBP/NZD exchange rate fell by over 1% after the Reserve Bank of New Zealand jawboned the ‘Kiwi’ lower.
The RBNZ has long expressed dissatisfaction with the strength of the domestic currency, and though the New Zealand Dollar has fallen recently (in response to declining dairy prices and a halt in interest rate increases) it appears the central bank still views the currency as overvalued.
Governor Graeme Wheeler asserted; ‘The bank would welcome a move towards a more sustainable exchange-rate level. Unjustified and unsustainable are important considerations in assessing whether exchange-rate intervention is feasible.’
Talk of intervening in the foreign currency market saw the New Zealand Dollar plummet against all of its most traded peers, and the Australian Dollar followed it lower.
As commented by currency strategist Todd Elmer; ‘The Australian Dollar is just selling off in sympathy with the New Zealand Dollar, following the RBNZ’s verbal intervention. The fact that the Australian Dollar can sell off on such a weak catalyst signals that short positioning is not stretched. It’s one of the most vulnerable currencies.’
Additional gains in the GBP/AUD and GBP/NZD exchange rates were secured after Bank of England Governor Mark Carney delighted investors by adopting a moderately hawkish tone when speaking of the prospect of UK interest rate increases.
In the view of currency strategist Jane Foley; ‘Carney’s definitely preparing the ground for the first interest-rate hike. Buying the Pound against the Euro is a much safer proposition. There is so much Dollar bullishness out there it’s more likely to be an uneven ride for Cable.’
Pound Sterling to Australian Dollar Exchange Rate Forecast
Before the weekend further movement in the GBP/AUD, GBP/NZD pairings could be triggered by China’s Conference Board Leading Economic Index and the UK’s Hometrack Housing Survey.
South Pacific reports to look out for next week include New Zealand’s Building Permits figures, the ANZ Roy Morgan Weekly Consumer Confidence Index, the AiG Performance of Manufacturing Index, Australian retail sales data, Australian trade balance figures and the AiG Performance of Services Index. China’s non-manufacturing PMI will also be of interest.
Disappointing fundamentals could help the Pound continue its upward trajectory against the Australian Dollar and New Zealand Dollar.
Australian Dollar (AUD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Australian Dollar,
,US Dollar,0.8810,
Australian Dollar,,Euro,0.6914,
Australian Dollar,,Pound,0.5393,
Australian Dollar,,New Zealand Dollar,1.1086,
US Dollar,,Australian Dollar,1.1377,
Euro,,Australian Dollar,1.4442,
Pound Sterling,,Australian Dollar,1.8538,
New Zealand Dollar,,Australian Dollar,0.9026,
[/table]
