Weak Performance Forecast for Australian Dollar (currency:AUD) against Pound (currency:GBP)

July 23, 2015 - Written by John Cameron

STORY LINK Weak Performance Forecast for Australian Dollar (currency:AUD) against Pound (currency:GBP)

UK Retail Sales See Pound Sterling to Australian Dollar Exchange Rate Fall from Over Six-Year High

The news that UK retail sales fell by -.0.2% on the month rather than climbing the 0.4% expected left the Pound trending in a weaker position against peers like the Australian Dollar, Euro and New Zealand. With no notable UK data scheduled for publication today, Sterling is likely to hold declines into the weekend.

Earlier...

GBP to AUD Conversion Rate Breaches 2.1200 Level after BoE Minutes

The Pound Sterling Australian Dollar exchange rate GBP AUD breached the 2.1200 threshold during yesterday’s trading session following the publication of the latest Aussie inflation figure during the early hours of Wednesday morning.

Australian Inflation Data Below Forecast, Weakens AUD/USD, AUD/GBP Exchange Rates

The headline year on year Consumer Prices Index figure for Q2 showed at a below-expectations 1.5%; analysts had been anticipating a print of 1.7%, so it was a considerable undershoot for this key number. The relatively low level of inflation in the Land Down Under gives the Reserve Bank of Australia a free hand to countenance further interest rate cuts for the second half of this year and the Pound Sterling climbed to as high as 2.1224 against the Australian unit as a result; the pair had started the day at 2.0940 GBP AUD.

However, the move out of Aussie-denominated assets on the session was not solely down to the price rise numbers.

Dan Been, a strategist at leading Australian retail bank ANZ explained that, ‘in both directions the moves (for the Australian Dollar) were more about positioning. We didn’t learn anything fundamentally new today with the information we saw.’ He went on to state that, ‘there’s also been a weight on the currency because iron ore futures in China are down almost 4 per cent.’ The suggestion that demand from Australia’s number on export destination continues to ebb is forecast to subdue the Aussie’s performance moving forward.

Currency Predictions: UK Mortgage Data Forecast to Direct Pound Sterling (GBP) Exchange Rate

Elsewhere, look for this morning’s UK Mortgage Approval figures to provide Sterling with further near-term direction. The impression exists amongst economists that the Bank of England’s measures to curb levels of lending by British banks to the nation’s property owners, which it introduced last year, are beginning to cool activity levels in the domestic property market. If this morning’s numbers corroborate this, then expect the Pound Sterling to leak further support against the euro (currency:EUR) and the US Dollar (currency:USD).

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