With the outlook of Sterling (GBP) dominated by the dissatisfactory Bank of England data, the Australian Dollar (AUD) has remained strong to move the GBP/AUD exchange rate lower.
Bank of England Interest Rate Disappointment Sees GBP/AUD Losing Fresh Ground as Pound Softens
Mixed results on Thursday for the Australian employment data saw the bullish run of the ‘Aussie’ (AUD) take a bit of a dent. Employment Change rose massively over estimates, hitting 38.5 thousand over the previous month’s 7 thousand but the country’s Unemployment Rate equally increased, to 6.3% rather than holding steady at 6.1% as had been expected. Together they offered a reminder that the South Pacific nation’s economy is far from recovered in spite of the optimism that had seized trading earlier in the week. With expectations fuelling a strong Pound (GBP) the GBP/AUD exchange rate rose on these figures to reach a peak of 2.1333.
The main news, however, was the Bank of England (BoE) ‘Super Thursday’ which saw the Rate Decision, Inflation Report and Monetary Policy Committee (MPC) meeting minutes all published together for the first time. It was not a positive day for Sterling (GBP), however, as the MPC voted 8-1 in favour of holding interest rates at their current level, a disappointment to pundits who had been anticipating two or even three dissenters. With the hopes for an rate hike before the end of the year almost entirely banished, the GBP/AUD pairing swiftly fell to 2.1154 and continued to trend weakly in that range overnight.
UK Balance of Trade Fails to Offer Rally for Pound, GBP/AUD Declines with Australian Home Loans and Construction PMI
Australia’s Construction PMI improved this month, rising to 47.1 over 46.4, to edge nearer to the index’s neutral baseline of 50 and a state of positive growth for the sector. Home Loans were equally positive for the nation as the figure entered the green, at 4.4% from -7.3% in the previous month. Renewing faith in the Australian economy once more, this worked to drive down the GBP/AUD pairing further to strike a fresh weekly low of 2.1009.
Meanwhile, the UK’s Balance of Trade saw a lower-than-expected drop, the deficit increasing to 9.18 billion rather than the 9.30 billion that pundits had been anticipating. This was not, however, enough to really recover the Pound’s earlier momentum as the BoE disappointment has continued to sour traders to the currency, especially in the face of relatively strong showings by rivals such as the ‘Greenback’ (USD) and ‘Aussie’.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast: Pound Unlikely to Return to Form in Coming Week with ‘Aussie’ Domination
Chinese data over the weekend may encourage the bullish run of the Australian Dollar to carry on unabated, particularly if the year-on-year Imports figure beats expectations. The NAB Business Confidence and the Australian Consumer Confidence Index could also boost the ‘Aussie’ further to potentially see the GBP/AUD pairing hit another fortnightly low should they demonstrate continued economic health.
Unemployment Rate and Employment Change for the UK might offer the Pound a chance at a rally on Wednesday, with encouraging figures potentially capable of warding off the sustained influence of the BoE data.
Current GBP, AUD Exchange Rates
Presently the GBP/AUD exchange rate remains trending downwards at a new low of 2.0993, with the AUD/GBP pairing in the range 0.4761.