Pound to Aus Dollar Exchange Rate Outlook - GBP AUD Slips as Australian Dollar Recovers vs USD & EUR

September 29, 2014 - Written by Frank Davies

STORY LINK Pound to Aus Dollar Exchange Rate Outlook - GBP AUD Slips as Australian Dollar Recovers vs USD & EUR

Monday's Pound to Australian Dollar exchange rate (GBP/AUD) positive gains (after the ‘Aussie’ softened over the weekend.) fell away today as the Aus currency recovered against the main curencies.

Yesterday, the Australian Dollar fell against the Pound Sterling, Euro, US and NZ Dollars following statements from the Reserve Bank of New Zealand (RBNZ), which announced that the central bank sold masses of the New Zealand Dollar to intervene in the exchange rate. Furthermore, political unrest in Hong Kong is also thought to be pushing the ‘Aussie’ lower.

Here are the latest Pound and Aus Dollar forex rates: (updated 30th September 2014)

- The dollar to australian dollar exchange rate is -0.35 per cent lower at 1.14365.
- The australian dollar to euro exchange rate is +0.85 per cent higher at 0.69249.
- The australian dollar to pound exchange rate is +0.56 per cent higher at 0.53952.
- The australian dollar to dollar exchange rate is +0.35 per cent higher at 0.87440.

Australian Dollar Tumbles Against Pound and Euro

The Australian Dollar fell on the news that the RBNZ has been selling off large amounts of its neighbouring currency, the New Zealand Dollar.

As a result of the intervention, the ‘Aussie’ fell against a basket of other majors.

The effect of the development is likely to be felt throughout Monday as there is no Australian domestic data to bolster the commodity currency.

Forex expert Sue Trinh commented: ‘Nothing else is going on in the currency markets today other than the “Kiwi’s” underperformance and “Aussie”, in sympathy, is being dragged a little bit lower.’

However, a lower Australian Dollar will be welcomed by many after months of the asset remaining stubbornly high against other majors.

Alan Joyce, boss of Airline giant Qantas, has stated that he believes the lower ‘Aussie’ could help the major airline.

As the Australian Dollar has sunk to an eight-month low against currencies such as the US Dollar (USD) in recent weeks, Qantas will now find competing against international competitors easier.

Moreover, domestic flights may also start to increase. Joyce commented: ‘It narrows the gap in terms of our competitive cost base with other international carriers.

Because we have 65% of the domestic market we obviously disproportionately benefit from Australians staying home and travelling.’

Global Politics Impact the Pound to Australian Dollar Exchange Rate

Both the Pound and the Australian Dollar have felt the effects of geopolitical tensions, specifically the current Iraq and Syria situations.

However, some analysts believe that the ‘Aussie’ has also softened from escalations in civil unrest in Hong Kong as China is Australia’s largest trading partner. Hong Kong has seen its banks and much of the city close as pro-democracy demonstrations take over. Chinese data has dipped in recent weeks, fuelling fears that the nation’s economic expansion had taken a downturn. Industry expert Ryan Huang commented: ‘The recent stream of China macro data has not been particularly strong to bolster investor confidence, and worsening sentiment will not do the markets any favours.’ The disruptions in China are the worst on record since the country reclaimed its independence twenty years ago.

Meanwhile, the Pound saw losses last week as the UK parliament was recalled to discuss the decision to assist in airstrikes against Islamic militants in Iraq and Syria.

RAF pilots have begun combat missions against ISIL (Islamic State of Iraq and the Levant) with heavily armed jets. As the current situation in Iraq continues, the Pound may be subject to volatility.

Monday has seen the release of some disappointing UK data. Domestic Mortgage Approvals for August came in softer than expected at 64.21.

Economists had predicted 65.0K. Furthermore, Consumer Credit also dropped in August at only £0.898B in comparison to July’s £1.108B.

The Pound has faced headwinds of late and is in need of a string of favourable data to help bolster Sterling’s exchange rate.

Tuesday will see the release of the UK Consumer Confidence Survey, a report indicative of the current mood of UK consumers. The UK’s final second quarter growth data will also be of interest to anyone invested in the Pound to Australian Dollar exchange rate.

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