Aus & NZ Dollar Forecasts - Pound to Australian Dollar & New Zealand Dollar Exchange Rates Forecasted To Decline

August 29, 2014 - Written by John Cameron

STORY LINK Aus & NZ Dollar Forecasts - Pound to Australian Dollar & New Zealand Dollar Exchange Rates Forecasted To Decline

The Pound Sterling (currency:GBP) failed to gain any ground against either the Australian Dollar (currency:AUD) or New Zealand Dollar (currency:NZD) towards the end of the trading week in spite of a dip in investor sentiment.

The GBP AUD and GBP NZD exchange rates are now forecast to incur further losses.

A risk-off trading environment has prevailed in the global currency markets today following the revelation from Ukrainian President Petro Poroshenko that Russia had deployed troops in his nation.

The Ukrainian leader cancelled a visit to Turkey because the alleged incursion into his nation’s sovereign territory, which Moscow denied.

The latest Aus and NZ forex pairs are detailed below:

- The Pound Sterling to Australian Dollar exchange rate is trading up +0.04% at 1.77507 GBP/AUD.
- The Pound Sterling to New Zealand Dollar exchange rate is trading up +0.07% at 1.98225 GBP/NZD.
- The Euro to Australian Dollar exchange rate is trading down -0.19% at 1.40759 EUR/AUD.
- The Euro to New Zealand Dollar exchange rate is trading down -0.16% at 1.57187 EUR/NZD.

The renewed flare-up in tensions between Russia and Ukraine caused global share markets to slump, with London’s headline FTSE 100 closing down by 0.24%, while Europe’s premier exchange, the Frankfurt Dax, lost a significantly greater 1.38% on the session. The euroland’s bourses have taken the brunt of the hit during recent escalations of tensions in Eastern Europe, so this was far from a surprise.

Meanwhile, America’s broad-ranging S&P 500 Index was holding back below the psychologically-key 2,000 threshold a short time ago – a level which it breached several times earlier this week. Conversely, the VIX ‘Fear Index’, which measures the number of protective ‘put’ orders placed by equities traders in the States, was up by almost 4% earlier today as the potential for conflict between Russia and Ukraine increased.

Turning to the currency markets, in spite of the shift into safe haven assets from traders, the Pound still failed to register any gains against the high-yielding Australian and New Zealand Dollars (currency:AUD) (currency:NZD). The Pound’s failure to climb even against these risk sensitive tenders illustrates the lack of support for the Pound in the markets. The poor showing for Sterling may well be down to lingering downside triggered by comments from the International Monetary Fund two weeks ago suggesting that the UK unit is overvalued by as much as 10% against the other major global currencies. The confirmation from Ben Broadbent, the deputy Governor of the Bank of England, that he was of the same opinion less than 48hrs later, added to the selling pressure on the Pound.

Sterling may incur further losses tomorrow if the latest edition of the closely-monitored Nationwide House Price survey shows at below the anticipated annualised 10.2% level.

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