Aus Dollar Forecasts: 3 Reasons Why GBP/AUD & EUR/AUD Exchange Rates Predicted to Strengthen

November 5, 2014 - Written by John Cameron

STORY LINK Aus Dollar Forecasts: 3 Reasons Why GBP/AUD & EUR/AUD Exchange Rates Predicted to Strengthen

Wednesday's session opened lower for the Pound to Australian Dollar exchange rate, having soared to its highest level for 5 weeks, touching 1.8614 a short time ago.

The GBP/AUD now stands within a cent of its highest level since March and a break above 1.9187 would signal a fresh 5-year high for the Pound against the Aussie, but what has triggered this sharp move Northwards?

Latest Aus Dollar Rates Today:

The Pound to Australian Dollar exchange rate (GBP/AUD) converts +1.71 per cent higher at 1 GBP is 1.86125 AUD.
The Euro to Australian Dollar exchange rate is +1.36 pct higher with a conversion rate of 1 EUR equals 1.45478 AUD.
The US Dollar to Australian Dollar conversion rate is +1.97 pct higher at 1.16596 USD/AUD.
The NeZ Dollar to Aus Dollar exchange rate is +0.54 pct higher with a conversion rate of 1 NZD equals 0.89917 AUD.

Crude Oil Price Slumps Piling Pressure On Australian Dollar

The past 24hrs have seen the price of a barrel of Brent Crude oil hit its lowest level for some four years after Saudi Arabia cut the price of the reserves it sells to the United States.

The plunge to slightly below $81 per barrel spells bad news for commodity exporting nations including Australia.

Although the Antipodean state is not a major oil producer, the level of global commodity prices tends to move in step, leading analysts to predict that the price of metals may also head Southwards.

GBP AUD Gains Despite Poor UK Data

Today’s forward move for GBP AUD came in spite this morning’s disappointing UK data which revealed that the rate of growth in the UK’s services sector had unexpectedly slumped to its lowest level for some 17 months.

The general tone of recent UK data releases has been positive, so this morning’s number is more than likely a blip. If the next few UK data sets of significance beat expectations, then it seems likely that the Pound will record further gains against the Aussie.

Strong New Zealand Data Could Hurt Aus Dollar Exchange Rate

Last night’s New Zealand employment data thrashed expectations, pointing an overall level of joblessness of 5.4% during Q3 versus Q2’s counterpart showing of 5.6%.

The development suggests that the relative economic performance of the New Zealand and Australian economies is diverging and the drop off of around 0.50% in the Australian Dollar to New Zealand Dollar exchange rate of around 0.50% on the day attests to this.

The differing performances from the trans-Tasman economies are likely to see the Pound climb against the Aussie due to arbitrage trading.

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TAGS: Australian Dollar Forecasts Currency Predictions New Zeala Forecasts