Home » AUD » Pound to Australian Dollar Exchange Rate Forecast: Will GBP/AUD Rise on Higher Services PMI?

Pound to Australian Dollar Exchange Rate Forecast: Will GBP/AUD Rise on Higher Services PMI?

Australian Dollar Currency Forecast

UK Services Sector Growth could Trigger Pound to Australian Dollar (GBP/AUD) Exchange Rate Rally

The Pound to Australian Dollar (GBP/AUD) exchange rate has traded around a four-month low recently, but could be on track to recover in the coming week.

Pound Sterling’s salvation may come in the form of a UK services sector PMI for May, which will be out on Tuesday.

The services sector is more important than the construction and manufacturing sectors, as it represents the largest contributor to economic growth.

With that in mind, a forecast-matching rise for the services PMI from 52.8 points to 53.5 could send the Pound (GBP) soaring against the Australian Dollar (AUD).

The services PMI’s best reading for the year so far has been 54.5 points in February, but growth in May would still be a step closer to this level.

Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Volatility ahead on UK Earnings Data

Beyond the upcoming services PMI release, the Pound to Australian Dollar (GBP/AUD) exchange rate could also see movement when UK wage growth data comes out.

Due on 12th June, these figures are predicted to show an acceleration in the pace of earnings growth with bonuses included, from 2.6% to 2.9%.

Faster wage growth could push the GBP/AUD exchange rate higher, as it would increase the chances of a Bank of England (BoE) interest rate hike in 2018.

Increased wage growth isn’t the only factor under consideration by BoE policymakers, but would nonetheless be a step closer to a rate hike.

Australian Dollar to Pound Exchange Rate Forecast: Are AUD/GBP Losses ahead on Manufacturing Sector Slowdown?

The week’s last significant Australian data might end up weakening the Australian Dollar to Pound (AUD/GBP) exchange rate, if it prints as expected.

Like the UK, this will be a manufacturing sector PMI out on Friday, also covering activity levels in May.

The current forecast is for levels of manufacturing activity to have fallen during the month from 58.3 points to 57.1, which would represent a slowdown for the sector.

Over the long term, the Australian manufacturing sector has gradually expanded so a slowdown here might only have a small negative impact on the AUD.

Faster Pace of AU GDP Growth could Cause AUD/GBP Exchange Rate Rise

Looking further ahead, next week’s Australian GDP growth rate figures might push the Australian Dollar (AUD) up against the Pound (GBP).

Out on Wednesday, these readings are predicted to show a rise in quarter-on-quarter growth during Q1 2018 from 0.4% to 0.6%.

While a smaller anticipated rise, the year-on-year reading is also tipped to show an increase from 2.4% to 2.5%.

Accelerating GDP growth is generally good news under any circumstances, so a midweek AUD/GBP exchange rate rise is a distinct possibility.