Pound Australian Dollar Exchange Rate Forecast: GBP/AUD Predicted To Fall as Aussie Dollar Boosted by RBA Interest Rate Decision

Modified: Tuesday, 4 March 2014 09:31 BST - Written by Frank Davies

STORY LINK Pound Australian Dollar Exchange Rate Forecast: GBP/AUD Predicted To Fall as Aussie Dollar Boosted by RBA Interest Rate Decision

The Pound Australian Dollar exchange rate (GBP/AUD) drops as the Aussie Dollar boosted by RBA interest rate decision and Russian deadline passes last night.

This morning’s session has seen a sense of calm lap over the global markets following yesterday’s frenetic trading day which saw volatility spike. The $VIX index, which gauges fear levels amongst equities traders in the States, was standing at below the 15.00 threshold at the end of last week. However, the index had traded up to above the 17.00 level during late trading yesterday as investors sought out safe havens for their funds due to developments in the Crimea region of the Ukraine.

Moscow’s MICEX index shed almost 10.0% of its value on the day, while the ultimate safe haven asset – gold – was well supported during the session. Meanwhile, the Dax index of equities in Germany slumped by nearly 3.5% as analysts warned of the damaging effect which a conflict in the Ukraine would have on the Teutonic economy thanks to its heavy dependence on the supply of natural gas from Russia.

The Kremlin’s military build up in the Ukraine, combined with reports that Moscow’s troops were digging trenches on the border between Russia and Crimea, had triggered heightened levels of nervousness amongst market participants. Their jumpiness was accentuated by reports on the news wires which had suggested that Russian soldiers would open fire on their Ukrainian counterparts if they did not surrender their weapons before 0300hrs last night.

In the end, the deadline passed without any action from Russia allowing investors’ frayed nerves to recover. This outcome has allowed the Commodity Dollars to recover against Pound Sterling, sending the Pound Australian Dollar exchange rate to peel back to as low as 1.8560 GBP/AUD during Asian trading, while the Pound New Zealand Dollar rate has held below the two to one threshold GBP/NZD. The Australian Dollar was further assisted overnight by the latest Reserve Bank of Australia policy decision, which saw the RBA hold interest rates at 2.5%, while maintaining its assessment that domestic monetary policy remains appropriate. The Pound Australian Dollar exchange rate forecast is to fall following the development.

Important Australian Dollar Exchange Rates (As of: 09:00 GMT 04/03/2014)

The Pound Sterling to Australian Dollar exchange rate is trading down -0.12% at 1.86520 GBP/AUD.
The Euro to Australian Dollar exchange rate is trading down -0.24% at 1.53548 EUR/AUD.
The US Dollar to Australian Dollar exchange rate is trading down -0.36% at 1.11656 USD/AUD.
The New Zealand Dollar to Australian Dollar exchange rate is trading down -0.11% at 0.93604 NZD/AUD.

The Australian Dollar to Euro exchange rate is trading up +0.24% at 0.65126 AUD/EUR.
The Australian Dollar to Pound Sterling exchange rate is trading up +0.12% at 0.53614 AUD/GBP.
The Australian Dollar to US Dollar exchange rate is trading up +0.36% at 0.89561 AUD/USD.

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