GBP/AUD Conversion Rate Forecast to Rally after British Manufacturing Output Unexpectedly Rose
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate surged by around 0.9% on Monday afternoon.
On Monday the British Pound strengthened versus nearly all of its most traded currency peers in response to better-than-expected domestic data. January’s UK Manufacturing PMI eclipsed the median market forecast drop from 52.1 to 51.6, with the actual result reaching 52.9. This will likely see first-quarter sectoral growth improve with domestic growth not fully reliant on services output. However, many analysts foresee difficulties ahead for manufacturers as new export orders continue to disappoint. In other news, British Mortgage Approvals improved from 70,400 to 70,800 in December, bettering the market consensus of a drop to 69,600 and further highlighting the robust British housing market at present.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.0266.
In contrast, the Australian Dollar dived versus its major peers on Monday after China’s official factory gauge posted the three-year low result of 49.4; signalling a record sixth-consecutive month of manufacturing contraction in the world’s second-largest economy. This, combined with a close to 1.8% drop in the Shanghai Composite Index caused traders to avoid high-yielding assets. As a result, the ‘Aussie’ (AUD) declined versus nearly all of its major peers. Aiding the depreciation was disappointing domestic data which showed January’s Commodity Index dropped from 71.8 to 71.7, whilst the Reserve Bank of Australia (RBA) Commodity Index SDR contracted by -25.8% on the year in January.
Pound Sterling to New Zealand Dollar (GBP/NZD) Conversion Rate Predicted to Surge ahead of Global Dairy Auction
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate advanced by around 0.5% on Monday afternoon.
In response to the British manufacturing data, Rob Dobson, Senior Economist at survey compilers Markit stated; ‘The UK manufacturing sector registered an uptick in its rate of expansion at the start of 2016, shrugging off a number of potential headwinds, ranging from global financial market volatility to localised flooding in the North of the country. The domestic market remains the key growth driver. In contrast, the trend in new export orders continues to disappoint, falling back into reverse gear in January. Even after recent easing in the exchange rate, a number of manufacturers are still finding that the strength of the Pound against the Euro is impacting order inflows. Reports from companies also highlight how the general operating environment has become increasingly competitive both at home and abroad as firms scramble to win new customers.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.2056.
Much like its South Pacific neighbour, the New Zealand Dollar declined versus most of its major peers after weak data out of China prompted risk-aversion strategies. Weak data out of the US allowed the ‘Kiwi’ (NZD) to recover some of its losses, however, as traders await news from the Global Dairy Auction due tomorrow. If dairy prices fall again demand for the New Zealand Dollar will very likely diminish, especially with China continuing to struggle. Any sign of additional intervention from the PBoC, however, could see both Oceanic currencies appreciate.
Pound Sterling (GBP) Exchange Rate Forecast: Construction PMI to Provoke Changes
Over the coming few days there will be a number of British economic data publications with the potential to provoke changes for the GBP/AUD and GBP/NZD exchange rates. Tomorrow will see the publication of the UK Construction PMI, and Wednesday will see the Services and Composite PMIs released. However, Sterling trader focus will be dominated by ‘Super Thursday’ in which the Bank of England (BoE) will publish the inflation report alongside the interest rate decision and accompanying meeting minutes.
In terms of the ‘Aussie’ and ‘Kiwi’, domestic data may be overshadowed by proceedings in China. However, Tuesday will see the RBA interest rate decision which could cause significant AUD movement, although policymakers are expected to keep rates on hold at this time. The dairy trade auction and New Zealand’s labour market data will be of significance to those trading with the NZD tomorrow.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending within the range of 2.0134 to 2.0303.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending within the range of 2.1980 to 2.2125 during Monday’s European session.
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