Pound Australian Dollar (GBP/AUD) & Pound New Zealand Dollar (GBP/NZD) Forecast To Climb on Ukraine Crisis

April 28, 2014 - Written by Toni Johnson

STORY LINK Pound Australian Dollar (GBP/AUD) & Pound New Zealand Dollar (GBP/NZD) Forecast To Climb on Ukraine Crisis

The Pound Australian Dollar exchange rate (GBP/AUD) and Pound New Zealand Dollar exchange rate (GBP/NZD) are forecast to climb as tensions mount in Eastern Ukraine. Meanwhile, the New Zealand Dollar (NZD) will be afforded further direction by tonight’s March Trade Balance data.

Widespread losses for global share markets during Friday’s session look likely to continue today following an escalation of tensions in Ukraine. The assertion just before the weekend market shutdown from acting Ukrainian Prime Minister Arseniy Yatsenyuk that Russia was looking to start ‘World War Three’ didn’t help appetite for risk in the global markets, causing the broad-ranging S&P500 index in the US to close down by over 15 points.

The relevant currency exchange rates today:
- The Pound Sterling to Australian Dollar exchange rate is trading up +0.02% at 1.81253 GBP/AUD.
- The Pound Sterling to New Zealand Dollar exchange rate is trading up +0.37% at 1.96557 GBP/NZD.

However, images beamed around the world of Russian forces carrying out extensive military exercises involving firing hundreds of live missiles added to tensions, as did the Kiev administration’s confirmation during the weekend market close that it would fight any Russian invasion. Given the strong condemnation of Russia’s actions by Europe, the UK and the United States in recent days, it would appear likely that Ukraine’s vastly inferior forces would be bolstered by strong international backing in such an event.

The high-yielding currencies leaked support during Friday’s session, sending the Pound Australian Dollar and Pound New Zealand Dollar to as high as 1.8155 GBP/AUD and 1.9642 GBP/NZD respectively. Expect further gains for these risk-driven pairs should the mood in Eastern Ukraine blacken during this week’s trading session. In such an event, also expect the world’s ultimate safe-haven currency the US Dollar to enjoy a pronounced bout of safe-haven support. With the Pound Dollar exchange rate already showing signs that the forward move which it has enjoyed in recent months is petering out, it wouldn’t take much for the fundamentals to trigger a shift down to the 1.6000 GBP/USD threshold for the pair.

Data highlights for the coming 24hrs in the markets include this afternoon’s US Pending Home Sales numbers for March and the latest set of New Zealand Trade Balance numbers, both of which have the potential to alter levels for GBP USD and GBP NZD as we head into the middle part of the week.

For further Pound Sterling / Australian Dollar / New Zealand Dollar exchange rate forecasts/analysis, please refer to the main Currency News UK website.

Last updated 28/04/2014

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