Aus + NZ Dollar Exchange Rate Forecasts - Further Losses Predicted for Pound to Australian Dollar & New Zealand Dollar Rates

August 19, 2014 - Written by John Cameron

STORY LINK Aus + NZ Dollar Exchange Rate Forecasts - Further Losses Predicted for Pound to Australian Dollar & New Zealand Dollar Rates

Currency News UK presents our Aussie + NZ Dollar Exchange Rate Forecasts - Predictions see further losses for the Pound to Australian Dollar & New Zealand Dollar exchange rates - Inflation data from either side of the Atlantic has shaped movement in the global currency markets today.

The upshot has seen analysts forecasts for the Australian Dollar (AUD) and New Zealand Dollar (NZD) against the Pound Sterling (GBP) improve along with share markets, whilst the VIX Fear Index slumped.

- The Pound Sterling to Australian Dollar exchange rate is trading up +0.22% at 1.79139 GBP/AUD.
- The Pound Sterling to New Zealand Dollar exchange rate is trading up +0.46% at 1.98271 GBP/NZD.

The UK led the way this morning with the publication of the latest Consumer Price Index figures.

The July version of the British government’s headline measure of domestic price rises was expected to reveal a slight drop from 1.9% in June to 1.8% last month.

When the result came in at 1.6%, investors scrambled to adjust their positions in order to reflect a reduced likelihood that the Bank of England will be upping its key interest rate within the next 12 months. With little in the way of upward price pressure in the domestic economy to prompt the UK central bank to act, then why act?

The UK data sent the Pound Sterling lower across the board, with the Pound US Dollar exchange rate sliding from an early morning intraday peak of 1.6726 GBP/USD down to as low as 1.6607 a short time ago. The Pound euro exchange rate lost a slightly lower amount; by mid-morning the pair had traded down from 1.2524 to 1.2452.

The pronounced shift Southward for GBP USD was partly driven by US inflation figures published at 1330hrs BST this afternoon.

- The Euro to Australian Dollar exchange rate is trading down -0.18% at 1.43007 EUR/AUD.
- The Euro to New Zealand Dollar exchange rate is trading up +0.06% at 1.58280 EUR/NZD.

The key numbers revealed that the increase in price rises in the States had climbed by its smallest amount since February.

As with the counterpart UK CPI figures, which also revealed that domestic inflation was well under control, the figures provided investors with a clear indication that the local central bank is under no pressure to tighten its monetary policy any time soon.

The downshift in market participants’ Federal Reserve policy expectations helped global share markets register renewed upside, sending the benchmark S&P 500 index up to its highest level since 29th July at 1979.92 earlier. The world’s headline share market now stands well within touching distance of its all-time high of 1991.71 which it reached last month.

The upward move for equities was, as is invariably the case, accompanied by a renewed lurch lower for the VIX ‘Fear Index’ which slumped to a fresh near-term low of 12.22 a short time ago.

The improvement in global investor sentiment was accompanied by a broad-based improvement for the Australian and New Zealand Dollars in the global currency market. If VIX falls again tomorrow, then analysts forecast that the GBP AUD and GBP NZD exchange rates will record further losses.

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TAGS: American Dollar Forecasts Australian Dollar Forecasts Currency Predi Forecasts