Pound to Aus Dollar Rate Today: GBP/AUD Gains after Australian Building Approvals Flop

November 3, 2014 - Written by David Woodsmith

STORY LINK Pound to Aus Dollar Rate Today: GBP/AUD Gains after Australian Building Approvals Flop

Today's Pound to Australian Dollar exchange rate (GBP/AUD) trends higher following a tumble in Australian Building Approvals.

August saw 3.4% growth in the sector and economists had expected a -1.0% contraction to follow in September. However, the actual figure saw Building Approvals shrink by -11.0%.

Industry expert Stephen Miller stated: ‘The Aus Dollar did have quite a dip following the release of the data. The building approvals were very, very weak.’

Australian Dollar Falls on Building Approvals after Upbeat Manufacturing PMI

The Aus Dollar exchange rate (AUD) had the potential to firm on Monday following the release of a comparatively upbeat Australian AiG Performance of Manufacturing Index (PMI). The index crept closer to the expansionary benchmark of 50 index points at 49.4 from the former 46.5.

Exports improved in October as the Australian commodity currency weakened. New orders and stocks also showed increases. AiG Chief Executive Innes Willox commented on the figures, stating: ‘The slide in manufacturing activity we have seen for the past couple of months has eased, with the sector broadly stable in October. However, conditions remain patchy within the manufacturing sector with considerable differences between sub-sectors and with production and new orders lifting, whereas employment fell further during the month.’

With an exciting week of Australian data ahead, ‘Aussie’ fluctuations are likely. Tuesday will see the Reserve Bank of Australia (RBA) announce its interest rate decision, an event which has caused major speculation in recent weeks. Although the current 2.50% benchmark interest rate is expected to remain in place, the recent drop in Australian inflation caused heavy debate amongst economists regarding the RBA’s policy outlook. Australian consumer prices fell from 3.0% to 2.3% in the third quarter, easing pressure on the central bank to hike rates.

Pound Exchange Rate could Rally on Markit Manufacturing PMI

Meanwhile, the Pound could experience some movement following the Bank of England’s (BoE) latest interest rate decision, although no policy alterations are forecast. In the last three Monetary Policy Committee (MPC) meetings, two policymakers have dissented and voted for immediate increases in borrowing costs. While some economists had initially expected a rate hike to occur in November, others have re-adjusted bets to put the first increase in borrowing costs to be firmly within the second quarter of next year or later.

The Sterling exchange rate could rally on the back of the UK Markit Manufacturing PMI figure reaching a three-month high. The October statistic reached 53.2 from September’s 51.6, despite economists’ forecasts to soften to 51.4. Markit’s report read: ‘The UK manufacturing sector made a bright start to the final quarter of 2014, with rates of expansion in production and new business accelerating sharply from their September lows.’

In addition to the RBA interest rate announcement, Tuesday will also see the release of Australian Retail Sales and Trade Balance figures, which may see fluctuations in the GBP/AUD exchange rate.

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 Daily Cur Forecasts