Pound Slips against Australian Dollar (GBP/AUD) as House Prices Fall; UK CPI Ahead

December 15, 2014 - Written by James Fuller

STORY LINK Pound Slips against Australian Dollar (GBP/AUD) as House Prices Fall; UK CPI Ahead

Pound to Australian Dollar Exchange rate Outlook Today

The Pound to Aus Dollar exchange rate fell during Monday’s session as further emphasis was placed on the UK's cooling housing market.

Rightmove House Prices contracted in December by a disappointing -3.3% after November’s -1.7%. The annual figure depreciated from 8.5% to 7.0%. Rightmove Director Miles Shipside commented: ‘Whilst a near £9,000 drop is the biggest ever reduction in the price of newly marketed property compared to the month before and a sign of a market continuing to cool, a fall is not unexpected in December. Though sellers are fewer in number at this time of year, those that do come to market are often keener to sell so price lower in a bid to stand out.’ The fall in house prices buys the Bank of England (BoE) more time before hiking interest rates.

Meanwhile, Australian New Motor Vehicle Sales contracted in November by -0.6%. The figure came as a disappointment after October’s -1.6% decline. On the year vehicle sales dipped from -0.5% to -3.8%.
The Australian Dollar suffered losses in the early part of Monday’s session after hostages were taken in a Sydney cafe. Workers and customers of the Lindt cafe were held by a gunman who stated that he was politically motivated. The siege lasted over 16 hours and is speculated to be a terrorist attack. The gunman forced hostages to hold Islamic banners in the window for hours as police negotiations took place. The unrest in Australia’s capital initially caused fear in the market and saw the ‘Aussie’ take a dive.

Pound to Aus Dollar Forecast

Tuesday will see the release of the Reserve Bank of Australia (RBA) meeting minutes, which could alter the Australian Dollar depending on their tone.

Furthermore, China’s HSBC Manufacturing Purchasing Managers Index (PMI) is expected to slip from 50.0 to 49.8 on Tuesday.

As Australia’s largest trading partner, any favourable Chinese figures can boost the ‘Aussie’. However, any negative figures could pressure the Australian Dollar lower.

GBP/AUD Exchange Rate Outlook and UK CPI

Meanwhile, Tuesday will be influential for the Pound with the UK Consumer Price Index due for publication. Economists have forecast a dip in UK inflation from 1.3% to 1.2%.

The Bank of England (BoE) recently suggested that a fall in consumer prices could occur in the next six months, which initially pressured the Pound lower.

BoE meeting minutes are released on Wednesday which will give the details of the most recent vote on interest rates.

The Pound has the potential to rally if two or more of the Monetary Policy Committee (MPC) voted in favour of immediate interest rate increases.

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TAGS: Australian Dollar Forecasts Currency Predictions Pound Aus Forecasts