Pound to Australian Dollar (GBP AUD) & NZ Dollar (GBP NZD) Exchange Rate Forecast Hinges On Chinese Data

April 22, 2014 - Written by Ben Hughes

STORY LINK Pound to Australian Dollar (GBP AUD) & NZ Dollar (GBP NZD) Exchange Rate Forecast Hinges On Chinese Data

The Pound to Australian Dollar exchange rate (GBP/AUD) & Pound to New Zealand Dollar exchange rate (GBP/NZD) forecasts hinge on Chinese data released tomorrow: Today’s session brings a relatively light data schedule, allowing currency market participants to ease their way back into the swing of things following the extended Easter weekend shutdown. However, tomorrow and the rest of the week bring several risk events which have the potential to trigger market movement for the world’s major currencies.

The early hours of tomorrow morning sees the publication of the latest set of Australian inflation numbers which are likely to have an effect on investors’ expectations regarding the likely timing of the first interest rate hike in the Reserve Bank of Australia’s imminent policy tightening cycle. Expectations are high for the Antipodean price rise figure – the consensus amongst analysts is for a showing of 3.2% for the Q1 print – a considerable increase for the Q4 2013 showing of 2.7%. This set-up means that anything below 3.2% and the Aussie is likely to lose ground, sending the Pound Australian Dollar exchange rate back up towards the 1.9000 GBP/AUD threshold once more. The pair has been trading hands either side of the 1.8000 GBP/AUD barrier during early trading this week.

The RBA’s sister Southern Hemisphere central bank, the Reserve Bank of New Zealand, is due weigh in less than 24hrs later with its April policy announcement. Analysts are anticipating another rise in the RBNZ’s Official Cash Rate – an increase from 2.75% to 3.00% is expected in an effort to curb the sharp domestic property price increases of recent months. Such a move could send the Pound New Zealand Dollar exchange rate back down into the low 1.9000s GBP/NZD once more; if the RBNZ surprises analysts by plumping for a 50 basis point increase, then look for GBP NZD to tumble into the 1.8000s.

Wedged inbetween the two Antipodean releases is the publication of the latest edition of the closely-monitored HSBC survey of the Chinese manufacturing sector. Last week’s GDP growth figures for Q1 of this year revealed that the pace of growth in China’s economy had cooled to 7.4 during the first three months of this year. If tomorrow’s numbers hint that the Q2 GDP data from the world’s second largest economy are also likely to disappoint, and then look for buying pressure on Pound to Aussie Dollar (GBP AUD) and Pound to NZ Dollar (GBP NZD) to increase.

Currenct Pound Sterling / Australian & New Zealand Dollar Exchange Rates (Updated: 14:00 GMT 22/04/2014)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.09% at 1.79663 GBP/AUD.
The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.21% at 1.95399 GBP/NZD.
The Euro to Australian Dollar exchange rate is trading down -0.1% at 1.47572 EUR/AUD.
The Euro to New Zealand Dollar exchange rate is trading down -0.22% at 1.60497 EUR/NZD.
The US Dollar to Australian Dollar exchange rate is trading down -0.29% at 1.06794 USD/AUD.

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