Pound Australian Dollar GBP AUD Forecast Improves on Rolls Royce (RR.L) Commentary

November 13, 2015 - Written by John Cameron

STORY LINK Pound Australian Dollar GBP AUD Forecast Improves on Rolls Royce (RR.L) Commentary

Global Share Markets Extend Losses, GBP Cools on Rolls Royce Earnings

Global share markets have continued the downward march which they began yesterday during today’s trading session, with London’s benchmark FTSE 100 index shedding over 1.0% of its value in early trading following a loss of almost 2.0% yesterday.

The euroland’s bourses have given up a similar amount of ground over the past 48hrs.

It’s not often the case that individual company results have an effect on movement in the global currency markets, but yesterday’s session provided one such instance.

Perhaps the most blue-chip of all the London-listed Blue Chip PLCs is Rolls Royce Holdings (RR.L), so its forecast that this year’s earnings will come in at the bottom end of analyst’ expectations severely dented its share price.

The company’s assertion that it expected to face ‘headwinds’ next year due to ‘sharply weaker demand’ piled the pressure on its stock value and shares closed down by a hefty 19.6% on the day at 536.5p.

Rolls Royce’s relatively new Chief Executive Warren East commented that, ‘the speed and magnitude of change in some of our markets, which have historically performed well, has been significant and shows how sensitive parts of our business are to market conditions in the short-term.’

These words had a marked effect beyond the stock value of his company, with analysts taking them as a prediction of a pronounced slowdown in the world’s emerging markets.

GBP/AUD Conversion Rate Slid Yesterday on Positive Australian Jobs Data

Stock markets across the globe headed South as a consequence and the trade-led Commodity Dollars eased.

The Pound Sterling Australian Dollar exchange rate had slipped badly during early trading yesterday following the publication of a go-ahead set of Aussie jobs data during the early hours of Thursday morning.

However, these losses for the GBP AUD exchange rate were reversed as world equities prices slid and many FX insiders now foresee considerable upside for the pair in the short-to-medium term.

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