GBP AUD Outlook Today: Pound Falls vs Aus Dollar on Exchange Rate Markets as Chinese Data Helps Aussie

October 13, 2014 - Written by Ben Hughes

STORY LINK GBP AUD Outlook Today: Pound Falls vs Aus Dollar on Exchange Rate Markets as Chinese Data Helps Aussie

The British Pound to Aus Dollar (GBP/AUD) exchange rate tumbled as the week started, as the Aussie recouped losses from last week.

The Australian Dollar exchange rate gained support from positive Chinese figures which showed imports increased in September by 7% from -2.4% on a yearly basis.

In addition Chinese exports also increased in September to 15.3% on the year, smashing forecasts for an increase of only 12.0%.

Some economists are expecting further gains for the Aus Dollar in 2015 as the prospect of the Reserve Bank of Australia (RBA) adjusting the bank rate heats up.

Forex expert Steven Saywell commented: ‘If the market starts to price in a rate hike from the RBA any time soon that’s going to support the ‘Aussie’. ‘Aussie’ Dollar is super sensitive to rate hikes, more so than to commodity prices.’

The Pound to Australian Dollar exchange rate today is converting -1.12 per cent lower at 1.83357 GBP/AUD.
The Euro to Australian Dollar exchange rate is -0.2 pct lower with a conversion rate of 1 EUR equals 1.45360 AUD.
The US Dollar to Australian Dollar exchange rate converts -1.07 per cent lower at 1 USD is 1.14001 AUD.
The New Zealand Dollar to Australian Dollar exchange rate is -0.33 pct lower with a conversion rate of 1 NZD equals 0.89943 AUD.

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British Pound Sensitivity allows Aus Dollar Bullishness

Meanwhile, the Pound is still experiencing volatility as a result of different factors, one of which is the recent shift in politics.

The UK is due to see a general election in May 2015, an event that could cause Sterling weakness.

Political history was made on Friday when UKIP gained its first MP seat and came close to winning another in a close vote against Labour.

The shakeup has shown that the election may be a messy affair with a lot of uncertainty in the future of British politics.

UKIP leader Nigel Farage stated after the win: ‘Something big is happening here. People want change. They have had enough of career politicians in three parties who don’t even understand the problems they face in their everyday lives. People want real change. We’ve got a chance here in a general election next year that is likely to be very tight, in an election in which no one party is likely to have a majority. If UKIP can keep this momentum going, we could find ourselves next May in a position where we hold the balance of power.’

As political uncertainty continues in the approach to the general election, investors are likely to favour safe-haven currencies such as the Japanese Yen (JPY) and the Swiss Franc (CHF) over the Pound Sterling (GBP).

However, the UK may see an interest rate hike in the first quarter of 2015, a factor that could boost the GBP greatly.

However, the timing of the first around any increase in borrowing costs will have to take into account the general election in May as the UK currency will be unstable in the run up to such a heavy political event.

Pound vs Australian Dollar Exchange Rate Forecast

Monday will see the release of Australian Weekly Consumer Confidence figures and RBA official Guy Debelle speaking at an investment conference.

Any hawkish remarks by the central banker could encourage the ‘Aussie’ higher.

However, Tuesday is set to be much more influential for both the Pound and Australian Dollar with the publication of UK Consumer, Core and Producer Price Indexes as well as Australian Business Confidence figures.

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TAGS: Australian Dollar Forecasts Currency Predictions Daily Cur Forecasts