Gains Forecast for Pound Sterling GBP VS Australian Dollar AUD Exchange Rate Following Emergence of Dow ?Death Cross? Pattern

Modified: Friday, 14 August 2015 07:03 BST - Written by John Cameron

STORY LINK Gains Forecast for Pound Sterling GBP VS Australian Dollar AUD Exchange Rate Following Emergence of Dow ?Death Cross? Pattern

A third day of Yuan devaluation weighed on the Australian Dollar again on Thursday. The Yuan is now 5% softer than it was at the start of the week and the fact that Chinese importers have reduced purchasing power is taking a toll on Australia's economic outlook and the domestic currency.

Earlier...

Second Yuan Devaluation from PBoC Sees Australian Dollar Exchange Rate Fall: AUD to GBP, EUR, USD Lower

The Peoples’ Bank of China’s currency manipulation on Tuesday night has ensured that increased levels of nervousness amongst investors persisted in the global markets yesterday. The closely-monitored VIX ‘fear index’, which measures the volume of protective ‘put’ orders placed by Chicagoan equities traders, had spiked upwards by over 10% by the middle part of yesterday’s North American session. The move evidenced the jumpiness of market participants which the news from China had engendered;

Yuan Tumbles against US Dollar after Sanctioned 2% Weakening<./h2>

Tuesday brought the second successive weakening of the Yuan’s value against the US Dollar (currency : USD). The first session of the week had seen the PBoC devalue the Yuan by close to 2.0% and the following day’s Asian session brought a further drop of 1% in the value of China’s local currency.

Global Growth Predictions Dented by PBoC Actions: US Dollar Down on Pared Rate Hike Bets

The moves from the PBoC appeared to be a knee-jerk reaction to the publication of official government figures over the weekend which pointed to an alarming 8% fall in the level of exports out of China last month. However, equities traders are now fearful that, given the sharp weakening in the value of the Yuan, exports out of the Euroland, the US and the UK will now be priced out of China’s vast and lucrative domestic market. Analysts predict that such an outcome could put a dampener on the tentative global economic recovery of recent years.

Pound Sterling Predictions: GBP Set for New Best Conversion Rates against AUD, NZD

Technical analysts pointed to the appearance of a rare ‘Death Cross’ pattern on the charts of America’s headline Dow Jones Industrial Average index during Tuesday’s session as further evidence that the PBoC’s move marks the start of a significant correction for world share markets. The pattern, which saw the Dow’s 50-day simple moving average cross below its 200-day moving average, is considered by many technical analysts to be a forebear of a fresh downtrend in a market. If this prophesy comes to pass, and global equities market do indeed plunge in the near-term, then analysts forecast that the Pound Sterling (currency : GBP) will break to fresh highs against both the high-yielding Australian Dollar (currency : AUD) and the export-driven New Zealand Dollar (currency : NZD).

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