Pound Sterling Australian Dollar GBP AUD and Pound Sterling Kiwi Dollar GBP NZD Exchange Rate Forecast Mixed this Week

Published: Monday, 7 September 2015 07:00 BST - Written by Toni Johnson

STORY LINK Pound Sterling Australian Dollar GBP AUD and Pound Sterling Kiwi Dollar GBP NZD Exchange Rate Forecast Mixed this Week

US NFP Report Results in Notable Pound Sterling Conversion Rate Movement

Last Friday’s session in the global currency markets brought the publication of a decidedly confusing set of US labour market data and the fall-out brought significant movement for the Pound Sterling against some of the other sixteen most actively traded global currencies.

British Pound to US Dollar Exchange Rate Falls to Three-Month Low, GBP to NZD, AUD Currency Pairs Gain

Sterling slid against the US Dollar (currency : USD), sending the Pound US Dollar exchange rate down into the 1.5100s for the first time in months, but the UK unit climbed against the high-yielding Australian Dollar (currency : AUD) and New Zealand Dollar (currency : NZD). The move higher against the high-yielding Commodity Dollars saw GBP AUD and GBP NZD jump to as high as 2.2003 and 2.4219 respectively.

The improvement for Sterling against the US Dollar, Australian Dollar and New Zealand Dollar suggests that investors believe a US Federal Reserve interest rate hike is now close at hand. The next Fed policy meeting begins on 16th September and America’s central bank will announce its latest interest rate decision on 17th September.

US Unemployment Rate Falls, US Dollar Fluctuates: USD to GBP Exchange Rate Gains

Friday’s official government data revealed an unexpectedly large drop-off in the overall level of US joblessness from July’s level of 5.3% down to 5.1% last month. Recent missives from the Fed have highlighted this monthly unemployment reading as a key factor in deciding when to tighten US monetary policy. However, investors place at least as much significance on the Non-Farm Payroll job creation data, which is published at the same time; this month’s Non-Farm Payroll figure proved to be a significant disappointment, showing that only 173,000 versus an anticipated 217,000 new jobs had been generated in the States during the calendar month of August.

Commodity Currencies Forecast to Recover Losses this Week?

The result left analysts scratching their heads and asking whether the Dollar strength which followed the US jobs numbers had been overdone. Many economists also posited that the sell-off in the Commodity Dollars which took place after Friday’s US jobs data was also without foundation due to the fact that August’s US job creation numbers are almost always subsequently upwardly revised.

The mid-month Fed policy announcement hangs in the balance, as Rob Carnell of Dutch investment bank ING stated as last week’s trading session drew to a close – ‘we don't think (the US jobs data) is sufficiently strong enough for the Fed to proceed with a September rate hike without markets worrying that the data is not good enough to support it.’ Forecasts for the future performance of the Pound Sterling against the Aussie and Kiwi Dollars remains equally mixed.

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