Australian Dollar Exchange Rate Forecasts - Stronger GBP AUD, Aus Lower vs Euro (EUR) & USD Dollar Conversion Rates

September 9, 2014 - Written by Frank Davies

STORY LINK Australian Dollar Exchange Rate Forecasts - Stronger GBP AUD, Aus Lower vs Euro (EUR) & USD Dollar Conversion Rates

The UK Pound to Australian Dollar exchange rate began the trading week lower as the Scottish Referendum outcome takes the spotlight as the latest market concern.

The Pound Sterling (GBP) slumped against other majors, including the Euro (EUR), US Dollar (USD), New Zealand Dollar (NZD) and more following the release of the latest YouGov poll which has shown that votes for a break away from the UK by Scottish residents has risen to 51%.

Speculation has arisen that an independent Scotland could mean loses of up to 10% for Sterling’s value. Meanwhile the Australian Dollar has seen support from its largest trading partner China on the release of favourable figures.

The latest Aus Dollar conversion rates are as follows:

• The Australian Dollar to Canadian Dollar exchange rate is trading up +0.09% at 1.01969 AUD/CAD.
• 
  The Australian Dollar to Euro exchange rate is trading up +0.08% at 0.72016 AUD/EUR.
• 
  The Australian Dollar to Pound Sterling exchange rate is trading down -0.06% at 0.57608 AUD/GBP.
• 
  The Australian Dollar to New Zealand Dollar exchange rate is trading up +0.04% at 1.12216 AUD/NZD.
• 
  The Australian Dollar to US Dollar exchange rate is trading up +0.03% at 0.92797 AUD/USD.

Australian Dollar Strengthened with Favourable Chinese Figures

Last week saw the release of the AiG (Australian Industry Group’s) Australian Performance of Manufacturing Index slip in August attaining only 47.3 index points. July had attained a healthy 50.7 index points which denoted expansion as it resides over the 50 benchmark; August’s figure shows a contraction in the manufacturing industry as it resides below 50. Some believe that the high trading value of the Australian Dollar is causing a loss in business with AiG CEO Innes Wilox stating the strong ‘Aussie is ‘maintaining the intensity of import competition.’

The concerns from the data extend to housing construction which appears to be waning; Willox continued: ‘To date we have not seen the surge in housing construction flow through to the manufacturing sectors traditionally linked to house buildings such as metal products and non-metallic mineral products. In part this appears to be due to higher levels of import competition and in part because the simultaneous reduction in engineering construction is detracting from demand in these sub-sectors.’

However, Chinese data has bolstered the Australian commodity currency today with favourable figures; China as Australia’s largest trading partner has a knock on effect for the ‘Aussie’s’ value in the market. The Chinese Trade Balance attained $49.83B in August, far higher than the $40.00B forecast and the $47.30B in July. Alongside this, favourable figures were published by way of Chinese Exports, reaching 9.4% year-on-year in August. Today’s data bettered the 9.0% figure economists had predicted and followed on from July’s 14.5% growth. Conversely Chinese Imports dipped in August, falling by 2.4% in contrast to the 1.7% increase economists had expected. Economist Julian Evans-Pritchard stated: ‘Slower import growth reflects cooling investment, particularly in the property sector, which has weighed on commodity demand.’

British Pound Losing Momentum in Currency Market as 51% of Scots Vote ‘Yes’

Conversely the Pound Sterling (GBP) has tumbled against other majors as the Scottish vote for independence looms closer. Sunday saw the release of the latest YouGov poll which has highlighted 51% of participants voting ‘yes’ for Scottish independence. As a response Sterling slipped to its weakest level versus the US Dollar (USD) since November.

Currency expert Sam Tuck commented: ‘This ensures that even if Scotland votes “No” next week the issue will not go away. The GBP was under pressure as markers consider there to be little credible planning for a “Yes” vote with a large number of unresolved questions expected to cause a half in business investment and keep BoE (Bank of England) on the sidelines should Scotland vote “Yes”.’

The vote however is shrouded in speculation as polls fluctuate regarding the potential decision of the Scottish people. The latest vote has seen favour jump to 51%, whereas last week it remained at 47%. The Pound looks likely to remain volatile for some time until the outcome of the vote is announced, whereas the Australian Dollar (AUD) seems on course to remain popular to investors in the near future.

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