GBP to AUD Outlook and Future FX Forecast ? Sterling Gains on Aussie, Kiwi Today After IMF Remarks

June 24, 2015 - Written by John Cameron

STORY LINK GBP to AUD Outlook and Future FX Forecast ? Sterling Gains on Aussie, Kiwi Today After IMF Remarks

FOMC Rate Hike Bets Reduce Demand for AUD, NZD Exchange Rates

Both the Australian and New Zealand Dollars came under a little pressure on Wednesday as improved Federal Reserve interest rate hike expectations reduced demand for higher-risk and commodity-correlated assets. Comments from a Fed official and revised first quarter US growth data saw investors bet that the Fed still intends to adjust rates this year, and could take action as soon as September.

Earlier...

Pound Sterling (GBP) Exchange Rate Advances on AUD, USD, EUR on BoE Rate Comments

On Tuesday the British Pound to Australian Dollar (GBP/AUD), British Pound to US Dollar (GBP/USD) and British Pound to Euro (GBP/EUR) exchange rates experienced modest volatility as the Greek situation weighed on global risk appetite and the UK’s Confederation of British Industry’s Trends Selling Prices/Trends Total Orders data came in below forecast levels. Hints from a BoE official regarding higher UK borrowing costs later helped GBP gain on NZD, AUD and EUR.

GBP/AUD Exchange Rate Declines after Chinese Manufacturing PMI

The Pound spent the first half of Tuesday’s European session trending in a softer position against the Australian Dollar as investors responded to a modest improvement in China’s Manufacturing PMI. The index, compiled by Markit rose from 49.2 to 49.6 in June, exceeding forecasts for an increase to 49.4.

Markit economist Annabel Fiddes said of the data; ‘The latest Flash China Manufacturing PMI survey provided a mixed bag of data in June. On the one hand, the sector shows signs of improvement as output stabilised amid a slight pickup in total new work, while purchasing activity also rose slightly over the month. [However] The data add to evidence that the sector has lost growth momentum in Q2 as a whole, and suggests that the authorities may step up their efforts to stimulate growth and job creation in the second half of the year.’

Pound Sterling (GBP) Recoups Losses Today on IMF RBA Interest Rate Warnings

The Pound was able to claw back declines against the Australian Dollar as the week continued and the International Monetary Fund (IMF) issued remarks relating to the prospect of the Reserve Bank of Australia (RBA) cutting borrowing costs further later on in the year. The IMF warned that should the Australian economy continue to underperform, lower interest rates will have to be considered.

Mission chief for Australia James Daniel observed; ‘We think interest rates where they are today are broadly appropriate, however, we’re implicitly suggesting an easing bias. We see the risks to growth as somewhat tilted to the downside.’

The GBP/AUD exchange rate was trending in the region of 2.0363

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