Pound Sterling (GBP) Exchange Rate Forecast to Soften against the ‘Aussie’ (AUD) after UK Construction Growth Slows
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate declined by around -0.2% on Friday morning.
Friday has seen the British Pound decline versus many of its currency rivals after domestic data failed to impress. June’s Construction Output came in at 2.6% on the year; missing the median market forecast 3.3% growth. On a monthly basis, June’s Construction Output showed 0.9% growth; well below the market projection of 2.0%.
The headline figure does mask some positives in the sector, however, which accounts for around 6% of Britain’s Gross Domestic Product. David Milliken and Sarah Young, reporting for Reuters, stated; ‘Construction fell sharply after the financial crisis and was slow to recover. It gained pace early last year but then weakened towards the end of 2014, as a temporary slowdown in the housing market reduced the construction of new homes. Friday’s data suggested this trend may be coming to an end, with private-sector home-building up 3.9 percent on the quarter, the biggest rise since the third quarter of 2014.’
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 2.1135.
Australian Dollar (AUD) Exchange Rate Forecast to Edge Higher against the British Pound (GBP) after RBA’s Kent Signals Improvement in Australian Jobs Market
Reserve Bank of Australia (RBA) Assistant Governor Christopher Kent signalled that the worst is likely over for the Australian jobs market. This solidified speculation that the RBA will hold the benchmark interest rate for the remainder of 2015. ‘Developments suggest that there will be slightly less spare capacity in the labour market than earlier anticipated,’ Kent said in a speech Friday. He did suggest, however, that the RBA will keep an open mind with regards to interest rates. ‘There’s a slightly positive story to the recent data, but the economy is still growing at a moderate pace. The unemployment rate is still very high,’ he said.
Also aiding the ‘Aussie’ uptrend is improving market sentiment. Now that Greek MPs have accepted the terms for the third bailout deal, fears that the Hellenic nation will not be able to repay the European Central Bank (ECB) on August 20th have eased considerably. In addition, trader risk-appetite improved thanks to a stable Chinese Yuan and reassurance from the People’s Bank of China (PBoC) that it will do everything in its power to avoid excessive currency swings.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate dropped to a low of 2.1112 during Friday’s European session.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Gradually Gain Despite Poor Headline UK Construction Figure
Although the British asset softened in response to the headline construction output figures, the underlying positivity should see the Pound recover its losses. Therefore, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to recover losses. With that being said, iron ore prices are rebounding sharply after the Tianjin explosion was seen to have minimal impact on demand for the base metal. This could cause the Australian Dollar to strengthen versus its major peers.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate climbed to a high of 2.1218 during Friday’s European session.
Comments are closed.