The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate remained in a narrow range on Tuesday while the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate climbed. It was a mixed night for the ‘Aussie’ and the ‘Kiwi’ with favourable Chinese data emerging amid a backdrop of rate cut speculation and surprisingly weak Australian ecostats.
Chinese Manufacturing Climb Offers AUD and NZD Exchange Rates Some Stability
China’s HSBC Manufacturing Purchasing Managers Index (PMI) managed to land above forecasts, climbing from 49.2 to 49.6 in June. The ecostat is edging closer to the 50.0 expansion benchmark and was a particularly favourable development after economists had forecast a rise to only 49.4.
Markit economist Annabel Fiddes commented: ‘On the one hand, the sector shows signs of improvement as output stabilized amid a slight pick up in total new work. On the other hand manufacturers continued to cut their staff numbers, with the latest reduction the sharpest in over six years.’
Any favourable data out of China helps to bolster both the Australian and New Zealand Dollars as the oceanic nations and China shares such strong trade links.
Meanwhile, the Australian Weekly Consumer Confidence Index slipped from 114.5 to 114.0 in the week through June 21st. The Australian House Price Index made sluggish growth in Q1, with the annual figure rising from a negatively revised 6.7% to only 6.9% despite economists expecting a 7.4% ecostat to emerge.
The rest of the week is relatively quiet for Australian and New Zealand data, with only Thursday’s Australian Job Vacancies and New Zealand Trade Balance data worth noting.
Pound Sterling to Australian Dollar (GBP/AUD), New Zealand Dollar (GBP/NZD) Exchange Rate Forecast
Meanwhile, the Pound is (GBP) experiencing a quiet week for UK domestic data, leaving the UK currency extremely vulnerable to macroeconomic developments. Wednesday will see the UK release its BBA Loans for House Purchase ecostat, which could cause some moderate GBP/AUD, GBP/NZD exchange rate movement.
Any favourable data at this point is leading investors to price in the possibility of a Bank of England (BoE) interest rate hike. If speculation regarding a BoE increase heightens it’s likely that the Pound Sterling (GBP) exchange rate could rally.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is trending at 2.3087.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is trending in the region of 2.0478.