The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was trending within a tight range on Monday afternoon.
Despite the fact that data out of China printed reasonably positively, the Australian Dollar softened versus many of its most traded currency rivals. The depreciation can be linked to falling crude prices. Additionally, the geopolitical tensions in Greece have seen significantly dampened market sentiment, causing cooling demand for high-yielding assets such as the ‘Aussie’ (AUD).
The Pound, meanwhile, softened versus many of its currency competitors in response to a report from the Confederation of British Industry (CBI) which showed British growth forecasts had been slashed. A report from Moody’s also weighed on demand for the Pound as it stated that bringing forward the EU referendum could be hazardous for the UK economy.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is currently trending in the region of 1.9995.
Pound Sterling (GBP) Exchange Rate Forecast to Hold against the ‘Aussie’ on CBI Report
As explained above, a report from CBI which slashed UK growth forecasts caused the Pound to soften versus most of its peers on Monday. The report argued that the combined headwinds of a potential Greek exit from the Eurozone and the upcoming EU referendum would have a detrimental effect on British growth. Additionally, Moody’s warned the UK about the dangers of bringing forward the referendum.
‘A withdrawal from the EU would have negative implications for the UK’s growth prospects and — in the absence of an alternative trade arrangement with the EU that at least partly replicates the current access to the EU’s single market — would likely put pressure on the UK’s sovereign rating,’ Moody’s said.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate has fallen to a low of 1.9915 today.
Australian Dollar (AUD) Exchange Rate Forecast to Trend within Narrow Range against the Pound despite Positive Chinese Trade Data
Data out of the world’s second-largest economy printed positively on Monday which saw an initial ‘Aussie’ uptrend. China’s Trade Balance came in at $59.49 billion; bettering May’s median market forecast trade surplus of $44.80 billion.
Ongoing issues with Greece and the frayed relationship between Greek and European officials is also weighing on investor confidence. Additional losses can be attributed to speculation that the iron ore price rally will be short-lived. ‘This rally is living on borrowed time,’ Goldman analysts Christian Lelong and Amber Cai said in a note on Monday, targeting a drop back below $50 a ton.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast to Hold Steady on Lack of Data
Given the absence of further domestic data publications to provoke volatility, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold steady for the remainder of Monday’s European session.
Tuesday will see heightened GBP/AUD volatility with Chinese inflation data due for publication. Australia’s loan data will also impact upon ‘Aussie’ movement. British trade balance data will be of further interest to those trading with the British asset.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate climbed to a high of 2.0071 today.
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