Currency market sentiment weighed heavily on the Australian Dollar exchange rates, due to worries over the outlook of the Fed, while the Pound struggled to maintain its recent bullish gains. What next for the GBP to AUD exchange rate in the latest forecasts?
Today's foreign exchange investors interested in the Aussie find the British pound to Australian dollar over one per cent stronger thanks to the latest RBA speech.
Reserve Bank Governor Glenn Stevens confirmed that the RBA will lower rates to boost inflation, something that saw the Aussie dollar exchange rates crumble.
With little in the way to drive domestic sentiment on Monday the GBP/AUD rate trended narrowly, with risk appetite generally limited.
The ‘Aussie’ was forecast to rally later in the day if the US Manufacturing PMI proves disappointing, as the commodity-correlated currency remains largely driven by the odds of an imminent interest rate rise from the Federal Reserve.
Although the Australian Unemployment Rate defied predictions to hold steady at 5.7% this was not enough to shore the Australian Dollar exchange rates (AUD) up ahead of the weekend.
Having rallied sharply earlier in the week, the GBP/AUD exchange rate fell back slightly to end the week trending around 2.007.
Risk appetite was generally diminished by the unexpected hawkish April meeting minutes of the Federal Open Market Committee (FOMC), which raised the possibility of an interest rate hike as soon as June.
This helped to push the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate lower, reaching a fourteen-week low of 0.4914 as worries remained over the possibility of another Reserve Bank of Australia (RBA) rate cut in the near future.
Latest New Zealand/Australian Dollar Exchange Rates
On Friday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
FX markets see the pound vs pound exchange rate converting at 1.
The live inter-bank GBP-USD spot rate is quoted as 1.252 today.
The live inter-bank GBP-NZD spot rate is quoted as 2.103 today.
Please note: the FX rates above, updated 26th Apr 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.
Other Currency Exchange News
RBA to Drive This Week's Pound Sterling to Aus Dollar Exchange Rate Outlook
Speculation over the timing of the RBA’s next interest rate cut is expected to remain a key influence on the Australian dollar exchange rates in the coming week, with domestic data a little more limited.
RBA Governor Glenn Stevens will be speaking on Tuesday, with any indications of a less dovish outlook on policy expected to offer some support to the softened ‘Aussie’.
Bill Evans, Chief Economist at Westpac, certainly does not consider an interest rate cut likely in either June or July, noting:
‘The advantage of waiting until the August meeting is that another quarter of inflation will be available. Even though wages are seen to be the key drag on inflation the Wage Price Index does not exhaustively cover all the impact of wages on inflation – these are better captured in the Inflation Report itself, even though the direct impact of wages cannot be measured.’
However, if the odds of an imminent interest rate hike from the Fed continue to rise this could keep a high level of pressure on the Australian Dollar and the RBA itself.
AUD/GBP Exchange Rate Recovered Ground on BoE Dovishness
Demand for the Pound (GBP) strengthened in response to stronger-than-expected UK Retail Sales figures, which showed a sharp increase in consumer spending on the year in April.
However, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate was unable to maintain its bullish form heading into the weekend thanks to a round of investor profit taking.
Words from Bank of England (BoE) policymaker Jan Vlieghe also weakened the appeal of Sterling, as he suggested that the central bank could cut interest rates even in the event of the UK voting to remain within the EU.
Lower UK Borrowing Figure could Boost Pound Sterling (GBP) Exchange Rates
‘Brexit’ developments are likely to remain a cause of volatility for the Pound in the coming week, as markets remain jittery ahead of the June referendum.
Also of note will be the April Public Sector Net Borrowing figure, which is expected to show a more modest widening of the UK’s borrowing deficit and could encourage greater confidence in the strength of the domestic economy.
The AUD/GBP exchange rate could see further movement on the back of the second estimate of the UK’s first quarter GDP, however, even though investors do not anticipate any change from the previous figure.
The Coming Week's Aussie Dollar Economic Events
This week's economic calendar includes the CB Leading Index (source), RBA Gov Stevens Speaks (source), Aussie Construction Work Done (source), Private Capital Expenditure, RBA Assist Gov Debelle Speaks and finally RBA Assist Gov Debelle Speaks.