GBP AUD Rally Seen after Shock Slide in Australian Trade Balance

March 2, 2017 - Written by James Fuller

STORY LINK GBP AUD Rally Seen after Shock Slide in Australian Trade Balance

GBP Climbs against AUD despite Fears of Commons Bill Defeat

The Pound has managed a 0.6% rise against the Australian Dollar today, which comes after the UK Government was ‘defeated’ over an Article 50 amendment in the House of Lords.

Peers voted by a majority of over 100 to approve the amendment in question, which requires the Government to plan to secure the rights of EU citizens after Brexit begins.

Despite this seemingly positive development, the general outlook is that MPs will reject the amendment in the Commons, which will see it fail and could damage the Pound as a result.

GBP Predicted to Slump if Incoming Services PMI Shows Drop

Following a recent surprise rise in the UK construction PMI for February, the next major result will be the services PMI for the same month, due Friday.

This is expected to show a drop from 54.5 to 54.1; if these forecasts prove accurate or if the high-impact figure falls by more than expected, then the Pound could crash against the Australian Dollar.

Looking further ahead, March 10th will bring a spate of UK production figures and a trade balance figure, which could put the GBP AUD exchange rate in a strong position if they print favourably before the weekend.

AUD Demand Sees Rollercoaster Ride with Sharp Crash on Trade Stats after Prior GDP Windfall

The Australian Dollar has been a currency of extreme contrasts this week, having jumped in demand against the Pound on Wednesday in response to rising GDP growth.

Since then, however, the AUD has fallen by -0.6% against the Pound, following the news that January’s trade balance has shown an unexpected surplus reduction from 3.33bn to 1.30bn.

Westpac Bank official Andrew Hanlan was concerned over the news;

‘This is a disappointing start to the March quarter, pointing to the risk of some downside to real net exports for the quarter’.

AUD GBP Forecast: Recovery Possible if Sales and Services Rise ahead of RBA Rate Decision

While the Australian Dollar has been battered by the latest slide in domestic trade figures, it may still be able to end the weekon a positive note against the Pound.

Incoming data will include the February services index today, as well as a measure of January retail sales on Monday. A pair of rises in these fields would likely boost Australian Dollar demand.

Further ahead, the coming Tuesday will bring March’s Reserve Bank of Australia (RBA) interest rate decision, which could bring another rate freeze at 1.5%. Should RBA officials offer optimistic outlooks on the Australian economy despite the recent trade slump, then the AUD GBP exchange rate could bounce back.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Australian Dollar Forecasts Currency Predictions