Declines Expected for Pound Sterling (GBP) against New Zealand Dollar (NZD) and Australian Dollar (AUD)

August 3, 2015 - Written by John Cameron

STORY LINK Declines Expected for Pound Sterling (GBP) against New Zealand Dollar (NZD) and Australian Dollar (AUD)

RBA Leaves Interest Rates on Hold, Australian Dollar Gains

The Australian Dollar recovered losses against the Pound after the Reserve Bank of Australia (RBA) opted to leave interest rates on hold. Australian trade and retail sales data also exceeded expectations, lending the 'Aussie' additional support during the South Pacific session.

Earlier...

Chinese Manufacturing Data Pushes AUD, NZD Exchange Rates Lower Today

The global currency markets may have been shut on Saturday, but that didn’t stop a key piece of economic data being released in the Far East.

The latest official government gauge of activity levels in China’s manufacturing sector showed a slight but significant drop-off from June’s reading of 50.2 – analysts had been anticipating that the keynote figure would print at the same level as last month. The showing of 50.0 puts China’s manufacturing sector right on the cusp of slipping into contraction, (any result of below the 50.0 mark signifies shrinkage), meaning that next month’s counterpart PMI Manufacturing data will be very closely monitored. The result of 50.2 represented the slowest level of Chinese economic growth for some 8 months, leading JP Morgan the investment bank to issue a note stating that, ‘economic momentum is still very fragile’, in Asia’s premier economy.

GBP/AUD, GBP/NZD Conversion Rates Trend at Best Levels

Many economists continue to doubt the veracity of Chinese government data sets – the Beijing administration has rightly or wrongly garnered a reputation for ‘massaging’ official releases in order to suit their needs in recent years – and the fact that the real situation in China is worse than the numbers suggest is likely to affect the levels of several leading currencies during this week’s session. China is the number one destination for exporters based in both Australia and New Zealand and this fact is likely to weigh heavily on the Australian Dollar (currency : AUD) and the New Zealand Dollar (currency : NZD) during this week’s session.

Foreign Exchange Forecast: Pound Sterling (GBP) Could Extend Gains in the Coming Days

The Pound New Zealand Dollar exchange rate ended last week’s session at almost exactly 2.3700 GBP NZD and given the tone of the weekend data out of China, the pair could be set to trend higher during coming days. Analysts forecast that a break back above the 2.4000 threshold is likely. Meanwhile, the Pound Sterling Australian Dollar exchange rate ended last week in the high 2.1300s. A move through to a fresh multi-year high would now appear probable for the GBP AUD exchange rate.

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