Where Now for the Pound Sterling (GBP) vs the Commodity Dollars (AUD, NZD, CAD)?

November 30, 2015 - Written by David Woodsmith

STORY LINK Where Now for the Pound Sterling (GBP) vs the Commodity Dollars (AUD, NZD, CAD)?

GBP has been Trending Weakly Versus AUD, NZD and CAD

The Pound Sterling (currency : GBP) has been languishing in the doldrums against the Commodity Dollars, (currency : AUD), (currency : NZD) and (currency : CAD) during recent sessions having struck multi-year highs against these units during late Summer.

GBP to AUD Briefly Broached 2.2000 Last Week

The final Monday of August saw global share markets plunge to fresh multi-year lows as equities traders shifted out of risk en masse thanks to concerns that the US Federal Reserve might be about to hike its interest rate in spite of pronounced evidence that the world’s second largest economy – China – was heading for a hard-landing.

The Pound Sterling Australian Dollar exchange rate briefly breached the 2.2000 GBP AUD threshold at this time, while for a short time on ‘Black Monday’ – 24th August, 2015 – the Pound Sterling New Zealand Dollar exchange rate break the 2.5200 GBP NZD level for the first time since 2009.

However, the subsequent period has seen the Pound endure sustained losses against the Dollars from Down Under, with the Sterling Kiwi exchange rate spending a large portion of recent months below the 2.300 level and GBP AUD settling between the 2.0000 and 2.1000 range during recent days.

Taking a closer look, the key indicators suggest that the recent underperformance of the Pound against AUD, NZD, CAD may not last.

Futures markets are pricing-in a 77.5% chance that the US Federal Reserve will increase its headline interest rate for the first time in almost a decade at its final meeting of the year; decision day comes on 16th December and rate ‘lift-off’ is forecast by economists to dampen global demand and suppress support for the Commodity Dollars as a bloc.

AUD, NZD and CAD Futures Weak against Commodities Rout

Meanwhile, a quick glance at the Bloomberg Commodity Index (BCOM: IND) hints that the immediate future prospects for AUD, NZD, CAD may not be overly bright.

The closely-monitored index continues to plumb its recent depths and spent most of Friday trading at below the 82.00 threshold – within a small distance of its lowest level since the 2007 – 09 global financial crisis.

Analysts forecast that there could be renewed tough times to come for the Commodity Dollars.

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TAGS: Australian Dollar Forecasts Canadian Dollar Forecasts New Zealand Do Forecasts