Mixed Forecast for GBP Pound Sterling Exchange Rate vs AUD NZD

April 15, 2016 - Written by John Cameron

STORY LINK Mixed Forecast for GBP Pound Sterling Exchange Rate vs AUD NZD

AUD and NZD Exchange Rates Climb despite 7-Year Low Chinese GDP

Much as anticipated, last night’s Asian session saw official government figures confirm that activity levels in China’s vast economy once again contracted during the first three months of last year.

The statistics revealed that the world’s second largest economy expanded by an annualised 6.7% last month – down from the counterpart Q4 2015 showing of 6.8%.

The result represented the slowest level of Chinese economic growth for seven years.

The old market adage which advises that investors should ‘buy on the rumour, sell on the news’, once again held true and last night’s Chinese growth numbers failed to significantly dent support for the risk-correlated Australian Dollar (currency : AUD) and New Zealand Dollar (currency : NZD) during today’s session.

The Pound Sterling Aussie Dollar exchange rate crept into the low 1.8300s earlier today before pulling itself back above the 1.8400 threshold during afternoon trading.

Meanwhile, the Pound New Zealand Dollar exchange rate showed similar price action, initially edging Southwards to 2.0459 GBP NZD before recovering to 2.0652.

Chinese Data Supports Hopes of Stabilising Economic Outlook

Drilling down into the component elements of the official figures, many analysts expressed the belief that they were in fact a good news story, with the New Yuan Loans statistic hinting at a real pick-up.

Craig James of Commsec explained the resolute response to the Chinese GDP numbers earlier, stating that what followed in the market represented, ‘a collective sigh of relieve, not just here in Australia but around the world. All the results are above market expectations, it shows the rebalancing of the economy is proceeding to plan.’

He went on to note that, ‘if anything, the figures are surprisingly high, so one wonders about the sustainability of the growth rate for future months. Hopefully we'll see other economies around the world focus on lifting their own growth rates.’

For the above reasons, the near-term forecast for the Pound Sterling vs AUD and NZD exchange rate remains decidedly mixed.

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