The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate softened by around -0.25% on Thursday morning.
After Chancellor George Osborne announced his intention to sell the government’s stake in the Royal Bank of Scotland (RBS), after bailing out the bank in 2008, the Pound softened versus its major rivals. This is because the rate at which shares will be sold is significantly lower than the rate at which they were bought. Additional losses can be attributed to disappointing results from domestic data.
The Australian Dollar, meanwhile, strengthened considerably after labour market data bettered estimates. Positive data results out of China also aided the ‘Aussie’ (AUD) uptrend. However, the Oceanic currency pared some of its gains after Reserve Bank of Australia (RBA) Governor Glenn Stevens warned that a rate cut is likely.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.0002.
Pound Sterling (GBP) Exchange Rate Forecast to Decline versus the ‘Aussie’ as UK House Price Balance Misses Estimates
The solitary British economic data publication on Thursday printed relatively disappointingly. RICS House Price Balance was forecast to advance from 32% to 36% in May, but the actual result only reached 34%.
‘It is hardly surprising that prices across much of the country are continuing to be squeezed higher with property set to become ever more unaffordable,’ RICS chief economist Simon Rubinsohn said.
Chancellor George Osborne’s intention to sell the UK government’s stake in RBS was met with Sterling declination. Selling the shares at a considerably lower price than when they were purchased will anger UK citizens whose tax money paid for the bailout in the first place. Mr Osborne said; ‘It’s the right thing to do for British businesses and British taxpayers. Yes, we may get a lower price than that was paid for it – but we will get the best price possible. For the longer we wait, the higher the price the whole economy will pay.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has fallen to a low of 1.9888 today.
Australian Dollar (AUD) Exchange Rate Forecast to Gain against Sterling despite Dovish RBA
Australia’s labour market data produced much better-than-expected results on Thursday. May’s Employment Change was forecast to see 15,000 newly employed, but the actual result saw a massive increase of 42,000. In addition, Unemployment Rate bettered the median market forecast of a rise from 6.1% to 6.2% in May, with the actual result showing a positive declination to 6%. Also supporting demand for the ‘Aussie’ was positive data out of China, with the uptick in Industrial Production likely to see heightened demand for Australian raw materials.
However, the significant gains made during the Australasian session were pared after RBA Governor Glenn Stevens stated that the bank is prepared to intervene in the market to combat ‘Aussie’ overvaluation, even as the Sydney housing bubble continues to cause concern.
‘What’s happening in housing in Sydney, I find it acutely concerning for a host of reasons, many of which are not to do with monetary policy. I think it’s a social problem,’ Mr Stevens said. ‘I’m very concerned about Sydney, and I think some of what’s happening is crazy. But we’ve got a national focus to manage as well and that just increases the complexity.’
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Hold Losses ahead of US Advance Retail Sales Data
Given that US Dollar movement has a significant impact on the South Pacific asset, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to see volatility after US data is published. Friday will likely see GBP/AUD movement with UK Construction Output data due for publication.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate advanced to a high of 2.0093 today.
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