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British Pound Exchange Rate Forecast to Strengthen against the Australian Dollar (GBP/AUD) and New Zealand Dollar (GBP/NZD) on China’s Trade Balance

Pound Sterling Currency Forecast

Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Advance after UK Credit Conditions Improve

The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate gained by around 0.53% on Monday afternoon.

After last week saw the Pound decline as a result of uncertainty regarding British exports to the Eurozone amid geopolitical tensions in Greece, Monday has seen the British asset recover losses. This was due to optimism that the new Greek deal will avert any potential drag on British exports to the Eurozone. In addition, the Pound has continued to strengthen after Friday’s domestic data saw the British trade deficit narrow beyond expectations. On Monday the Pound gained as a result of a positive Bank of England (BoE) Credit Conditions & Bank Liabilities Survey  which showed heightened demand for mortgages in the second quarter and saw lending to businesses improve.

The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.0928.

The Australian Dollar, meanwhile, declined versus its major peers after data out of China failed to impress. June’s Trade Balance was forecast to hit a surplus of $56.70 billion, but the actual result only reached $46.54 billion. Also weighing on demand for the ‘Aussie’ (AUD) is a significant drop in gold prices after Federal Reserve rate hike speculation mounted following hawkish comments from officials.

The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending within the range of 2.0777 to 2.0974.

Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Trend Higher on Weak Dairy Prices

The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate advanced by around 0.55% on Monday afternoon.

The Bank of England Credit Conditions Survey stated; ‘Longer-term wholesale funding costs for UK banks increased in 2015 Q2, but remained low. Reflecting this, transfer prices rose slightly in Q2, having fallen in each quarter since 2013 Q3, according to respondents to the Bank Liabilities Survey. Retail funding spreads fell slightly. Issuance of wholesale term funding in 2015 Q2 was a little lower than in the previous quarter. Retail deposit growth was steady. Respondents to the Bank Liabilities Survey expected their total funding volumes to increase slightly in Q3. Mortgage approvals for house purchase were higher in April and May than the average in Q1 and the net flow of mortgage lending increased slightly in the three months to May. This is consistent with the increase in demand for secured lending reported in the 2015 Q2 Credit Conditions Survey. Mortgage rates fell slightly further and remained at historically low levels. Unsecured credit continued to grow robustly.’

The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.3165.

The New Zealand Dollar, meanwhile, softened versus many of its peers for similar reasons to its South Pacific neighbour. Primarily, the lower-than-forecast Chinese Trade Surplus weighed on demand for the ‘Kiwi’ (NZD). In addition to lower gold prices, weak dairy prices have also provoked New Zealand Dollar depreciation. Slightly improved market sentiment wasn’t enough to help either of the Oceanic currencies strengthen with so much uncertainty regarding the new Greek deal.

The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending within the range of 2.2978 to 2.3203 during Monday’s European session.