Pound to Aus Dollar Exchange Rate Outlook: GBP/AUD Gains Slip as UK Inflation Concerns

November 11, 2014 - Written by Frank Davies

STORY LINK Pound to Aus Dollar Exchange Rate Outlook: GBP/AUD Gains Slip as UK Inflation Concerns

The Pound to Australian Dollar exchange rate (GBP/AUD) lowered yesterday as upbeat Chinese statistics offered the latter currency support.

As one of the world’s biggest economies and Australia’s largest trading partner, any favourable data from China can adjust the Australian Dollar significantly.

Furthermore, weaker US data also enabled the Australian commodity currency to advance. Meanwhile, the Pound has fallen as the UK’s place within the EU is debated.

The Australian Dollar to Euro exchange rate today is converting +0.38 per cent higher at 0.69669 AUD/EUR.
The Australian Dollar to Pound Sterling exchange rate today is converting +0.38 per cent higher at 0.54618 AUD/GBP.
The Australian Dollar to New Zealand Dollar exchange rate is -0.02 pct lower with a conversion rate of 1 AUD equals 1.11184 NZD.
The Australian Dollar to US Dollar exchange rate is +0.57 pct higher with a conversion rate of 1 AUD equals 0.86736 USD.

EU Politics Pressure Pound (GBP) Exchange Rate Lower

Politics can cause major uncertainty in the market and trigger fluctuations in exchange rates.

The Pound has softened amid fears that the upcoming 2017 EU referendum could seriously damage the UK economy, despite Prime Minister David Cameron rebuffing such speculation.

Furthermore, the UK general election will be held in May and is an event that is likely to see massive Pound movement.

In addition, Bank of England (BoE) Governor Mark Carney has stated that the world’s largest and most influential banks should be placed under a strict regime in which rules are enforced to enable them to cope should another financial crisis strike. Carney is the head of the Financial Stability Board (FSB) which is hoping to have a global agreement and programme in place by 2019.

Carney stated that banks that are ‘too big to fail’ should be required to hold a minimum equity which can be turned into shares for creditors who lend to the bank in the face of a financial crisis. Therefore, the banks will not receive taxpayer subsidies to survive in the event of another recession.

Australian Dollar Exchange Rate (AUD) Gains after Upbeat Data

Meanwhile, the Australian Dollar gained when Chinese exports grew in October and the nation’s Consumer Price Index conformed to forecasts of 1.6% on the year. The ‘Aussie’ has since been able to reclaim losses against other majors following recent depreciation attributed to the falling price of iron ore, Australia’s largest export.

Monday saw Australian Home Loans statistic contract by -0.7% in September. Economists had expected only a -0.4% drop after August’s -0.9%. Australian ANZ Weekly Consumer Confidence is also out on Monday, while Business Confidence, Business Conditions and House Price Index will be revealed on Tuesday.

Key Day for Aus Dollar Forecasts

Wednesday will prove to be more influential for the Pound Sterling with UK Average Weekly Earnings, Claimant Count Rate, Employment Change, Weekly Earnings, Jobless Claims and Unemployment Rate figures published.

Furthermore, the Bank of England will release their Inflation Report, which could see major Sterling movement. Influential Australian data is thin on the ground on Wednesday; however, Credit Card Balances, Credit Card Purchases and Wage Cost Index statistics will be announced.

Chinese data released on Thursday, such as Industrial Production, could affect the Australian Dollar, as could the Australian Consumer Inflation Expectation report.

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