Chinese Loans Fall to Drag ‘Aussie’ (AUD) Down with Renewed Market Risk Aversion Today
After Australian Home Loans were found to have unexpectedly risen on the month in November, printing at 1.8% rather than -0.5%, demand for the ‘Aussie’ (AUD) has been more limited. Also dragging on the antipodean currency has been the revelation that Chinese New Yuan Loans fell further than anticipated in December. As a result the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has been making gains this morning in the range of 2.0812.
Earlier…
With the ‘Aussie’ (AUD) shored up by a lack of change in the Australian Unemployment Rate the Pound (GBP) has softened in anticipation of the first Bank of England (BoE) interest rate decision of 2016.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Climbed despite Stronger-than-Expected Chinese Trade Data
While traders were surprised by an unexpectedly improved set of Chinese trade figures yesterday it was not long before market scepticism negated the initial positive impact of this stronger showing. Exports showed a particularly large leap on the year in December, rising from -3.7% to 2.3%, as the domestic trade surplus widened substantially, seeming to indicate that the world’s second largest economy had recovered somewhat. However, the stark contrast with other economic data led to a fresh round of market volatility with base metal prices failing to achieve substantial support. Consequently, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate began to regain some of its recent losses as risk appetite declined.
BoE Rate Decision Weighs on Pound Sterling (GBP) Today, Australian Dollar (AUD) Bolstered by Strong Employment Data
Overnight the ‘Aussie’ (AUD) was shored up by the release of better-than-expected Australian unemployment data. The domestic Unemployment Rate held steady at 5.8% on the month in December, while Employment Change saw a decline of just -1,000 rather than the -10,000 forecast. As this failed to erase the bullish jump in employment seen in November the figures indicate that the Australian economy has remained stronger than previously thought, in spite of mounting negative global headwinds.
Following a recent raft of discouraging UK data the appeal of the Pound (GBP) has continued to decline on Thursday, ahead of the first Bank of England (BoE) interest rate decision of 2016. Some have suggested that long-running hawk Ian McCafferty could take a more dovish view today, a move that would further dent the odds of the BoE raising rates before the end of the year. With industrial production having fallen and inflationary pressure weak there is unlikely to be any sufficient incentive to spur policymakers into tightening monetary policy in the coming months.
GBP/AUD Exchange Rate Forecast: ‘Aussie’ May Advance with Australian Home Loans Predicted to Decline
Tonight’s Australian Home Loans figure is expected to show that lending continued to decline consistently on the month in November, a drop which may reassure traders concerned by the hot nature of the domestic house market. The antipodean currency could also benefit if December US Retail Sales are found to have fallen as anticipated, denting the US Dollar (USD) and the likelihood of an imminent Fed rate hike.
Should the BoE take a more dovish tone later today the Pound is unlikely to have a chance to recover ahead of the weekend, as pundits continue to lack incentive to return to the softening currency.
Current GBP, AUD Exchange Rates
At the time of writing, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending narrowly around 2.0781, while the Australian Dollar to Pound Sterling (AUD/GBP) pairing was at 0.4812.
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