Pound to Australian Dollar Exchange Rate Forecast: GBP/AUD Advances Before RBA Announcement

June 2, 2014 - Written by Minesh Chaudhari

STORY LINK Pound to Australian Dollar Exchange Rate Forecast: GBP/AUD Advances Before RBA Announcement

With the Reserve Bank of Australia’s policy decision looming the Australian Dollar (AUD) was trading in a weaker position against the Pound Sterling (GBP) on Monday. The Pound to Australian Dollar exchange rate has seen significant gains of 0.47pct at 13:00GMT on Monday. The ‘Aussie’ recorded short-lived gains over the weekend as a gauge of Chinese manufacturing showed stronger-than-forecast growth.

The Pound Sterling to Australian Dollar exchange rate is trading up 0.47pct at 1.81079 GBP/AUD.

China’s manufacturing PMI advanced from 50.4 in April to 50.8 in May – clear of the 50 mark separating growth from contraction and the strongest result for five months.

As concerns of a slowdown in China have been weighing on Australia’s own economic outlook, this report was a welcome surprise.

In the view of ANZ economist Li-Gang Liu; ‘The improvement of both PMIs suggests the economic activities have stabilised somewhat due to the recent pro-growth policies, including the budgeted fiscal spending acceleration and the tax rebates to support the external sector.’

The Australian Dollar exchange rate failed to keep gains

The Australian Dollar failed to hold its advance on Monday as an unexpected plunge in Australian building permits lessened the appeal of the commodity-driven currency.

The sharp flop of 5.6 per cent in building approvals in April, month-on-month, followed a revised decline of 4.8 per cent in March.

An increase of 2.0 per cent had been anticipated.

On the year building approvals rose by 1.1 per cent. A 12.3 per cent annual increase was expected.

The GBP/AUD pairing climbed by 0.5 per cent overnight and held gains as European trading got underway.

Although the UK’s manufacturing PMI did slip from 57.3 to 57.0 (as forecast by economists) the report showed that output, new orders and new export business continued to grow strongly and that job creation in the sector increased.

GBP to AUD forecast awaits RBA rate decision

The GBP/AUD pairing is likely to hold its gains until after the RBA has delivered its rate decision.

It is widely believed that the central bank will leave interest rates on hold.

Australia’s retail sales report will also have an impact.

A month-on-month sales gain of 0.3 per cent has been projected.

Latest Australian Dollar Exchange Rates (Sending Money to Australia) - Monday 2nd June 2014

The Pound Sterling to Australian Dollar exchange rate is trading up +0.47% at 1.81079 GBP/AUD.
The Euro to Australian Dollar exchange rate is trading up +0.41% at 1.47193 EUR/AUD.
The US Dollar to Australian Dollar exchange rate is trading up +0.52% at 1.08122 USD/AUD.
The Swiss Franc to Australian Dollar exchange rate is trading up +0.34% at 1.20510 CHF/AUD.
The New Zealand Dollar to Australian Dollar exchange rate is trading up +0.25% at 0.91542 NZD/AUD.

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