Pound Australian Dollar Exchange Rate Forecast: GBP/AUD Gains Predicted

April 14, 2014 - Written by Frank Davies

STORY LINK Pound Australian Dollar Exchange Rate Forecast: GBP/AUD Gains Predicted

Tonight’s Asian session brings the publication of the minutes of the latest Reserve Bank of Australia policy meeting. The Australian Dollar exchange rate has powered forward in the markets during the past two months as investors rapidly moved to factor-in a tighter policy bias from the RBA. However, many economists have suggested that the Australian tender has now strengthened too much for the liking of the nation’s policymakers – comments aimed at weakening the Aussie cannot be ruled out, placing the Aussie firmly on the near-term ‘in danger’ list.

Strong US Advance Retail Sales numbers for last month were not enough to strengthen the US Dollar against the Pound this afternoon. The March shop sales figures from the States revealed a month-on-month increase of 1.1% versus expectations of a 0.9% showing, while February’s counterpart print was upwardly revised to 0.7% at the same time. The expectation amongst analysts straight after the data release was that the Greenback would strengthen as a result as investors factored in a higher percentage chance that the Federal Reserve’s Quantitative Easing programme is on its last legs.

However, in the shakedown, the Pound US Dollar exchange rate has climbed to as high as 1.6744 GBP/USD, suggesting that even ostensibly good news regarding the American economy is not enough to support the Dollar following Fed Chair Janet Yellen’s comments of last week. The new Head of the Fed suggested that it could be a long time before US interest rates are on their way upwards again – news which came as a significant surprise to investors who had been pricing-in an American rate hike early next year.

Meanwhile, the Pound Sterling has put in a relatively strong performance on the day following more positive property market data, released during the early hours of this morning. The latest edition of the closely-monitored Rightmove House Price survey pointed to a monthly increase of 2.6% in British house prices, propping up the Pound. The report suggested that UK property prices are rising at an annualised 7.3% - up from last month’s 6.8%. In the absence of any further British data releases, today’s encouraging performance from the Sterling appears likely to have been driven by this publication.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts