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Pound Sterling GBP Gains vs AUD NZD CAD Forecast to Continue on China Woes

September 23, 2015 - Written by Ben Hughes

Chinese Data Sends AUD, NZD, CAD, Exchange Rates Lower Today



Analysts are hesitant, to say the least, to accept the veracity of official economic statistics from China’s government, so data published by private companies regarding the current situation in the world’s second largest economy is extremely closely monitored.

Given the increasing evidence of a slowdown in China’s economy, the latest Caixin/Markit manufacturing purchasing managers' index (PMI) survey, published a few hours ago, was therefore particularly closely monitored by FX insiders. The result was expected to be bad, with the consensus amongst analysts was that it would show only a marginal increase from August’s showing of 47.3. When the outcome printed at 47.0, pointing to a further contraction in the levels of Chinese factory output, the mood amongst market participants blackened.

Pound Sterling Could Strike Best Conversion Rates against Australian, New Zealand, Canadian Dollars



London’s benchmark FTSE 100 slid back below the 6,000 threshold during early trading as a response, before recovering slightly by the middle part of the day. Meanwhile, Shanghai’s headline SSE Composite index had shed over 2% of its value by the time it closed for business during the early part of the European equities session.

Lower Chinese Growth Forecast to Impact GBP to AUD, NZD, CAD Forex Predictions



The news of a poor showing from China’s manufacturing sector compounded the negative sentiment which was engendered by yesterday’s lowering of its 2015 growth forecast by the Asian Development Bank (ADB). Previously the ADB had predicted that China’s economy would expand by 7.0% this year, so the downgrade to 6.8% came as a surprise.

The effect of these dual announcements saw the Pound Sterling (currency : GBP) initially record good gains against the Australian Dollar (currency : AUD), the New Zealand Dollar (currency : NZD) and the Canadian Dollar (currency : CAD). However, these gains have been pared during the latter part of today’s UK equities session as institutional investors took profit. However, the outlook for Sterling against the thee ‘Commodity Dollars’ remains decidedly bullish.

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