Pound Sterling (GBP) Exchange Rates Boosted by Return to Growth for UK Services PMI
- The Pound to Australian Dollar exchange rate today: +0.08pct lower at 1.74734.
- The Australian Dollar to Pound exchange rate is 0.57230.
The GBP fluctuated against the AUD on Tuesday afternoon, as both currencies were strengthened by yet another US Dollar selloff.
As ISM’s Non-Manufacturing Composite report came in well below expectations, demand for risk-correlated currencies as well as the increasingly appealing Pound increased.
The Aussie dollar gave up much of its earlier bullishness however, as other risky currencies like NZD were more appealing due to commodity news
Demand for the AUD strengthened substantially following the RBA’s decision to leave interest rates on hold, with investors encouraged by the less dovish tone displayed by policymakers.
With the chances of the Federal Reserve raising interest rates imminently still weak there was little to prevent the antipodean currency from making bullish gains across the board on Tuesday morning.
The GBP/AUD fluctuated relatively widely on Monday afternoon, showing little in the way of bias
If this proves to be the case then the Reserve Bank of Australia is less likely to ease monetary policy further in the near future, a prospect that could see the GBP/AUD exchange rate back on a downtrend.
Pound Sterling (GBP) exchange rates shot up considerably over Monday morning, thanks to the outcome of August’s crucial UK services PMI result.
This had originally been forecast to rise from 47.4 to 49.4, which meant that the actual rise to 52.9 sent the Pound rallying against the Australian Dollar (GBP/AUD) and virtually all of its other peers.
Given that fears still linger about potential long-term damage from the ‘Brexit’ vote, UK investors were broadly cheered by this result, although some economists cautioned against committing to such optimism before the year’s remaining UK PMI results were released.
Latest Pound/Australian Dollar Exchange Rates
Pound to Australian Dollar Exchange Rate Outlook: BoE Speech and UK Production Stats due on Wednesday
The next major UK data likely to impact the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate will be released on Wednesday, when the morning will bring the nation’s manufacturing and industrial production results for July.
As it stands, forecasts have been pessimistic, with expectations being for a decline in both the month and the year for both fields. Also due over the morning on Wednesday will be a speech from Bank of England (BoE) official Jon Cunliffe.
Over Wednesday afternoon, BoE officials will attend a hearing at the Treasury Select Committee, while the National Institute of Economic and Social Research (NIESR) will release its GDP estimate for Q3.
Australian Dollar News: AUD Exchange Rates Steady while US Dollar Declines
Australian Dollar (AUD) exchange rates have been stable during trading on Monday, although this is mainly due to a shortfall in the value of its major rival, the US Dollar.
Australian domestic data has been extremely poor at the start of the week, with the AIG services index recording a collapse from a growth figure of 53.9 to a contraction range 45 points.
Other data out of the nation has seen the business inventories figure for Q2 rise on the quarter, along with the gross company profits result for the same period.
Australian Economic Outlook: RBA Rate Decision and Q2 GDP Data to Impact AUD Exchange Ratesk
Tuesday morning will bring the next big Australian economic announcement this week, consisting of the Reserve Bank of Australia (RBA) interest rate decision for September; a rate freeze at 1.5% has been forecast.
Other Australian data to watch out for will include Wednesday’s AIG construction index for August, as well as the Q2 GDP growth rate results.
In addition to a late speech from RBA official Philip Lowe on Wednesday night, the ‘Aussie’ may also be moved towards the close of the week by July’s trade balance outcome, which is due on Thursday.
Look to the Long-Term for UK Economic Performance, Warned Lloyds Economist
While the Pound was aided by the latest services PMI advance, Lloyds Bank Commercial Banking Managing Director and Head of Global Services Chris Sood-Nicholls reiterated sentiments that came after the previous week’s UK manufacturing PMI trumped expectations.
Speaking on Monday morning, Sood-Nicholls stated;
‘It is too easy to over-interpret often volatile monthly data, particularly sentiment-based indices. Without a sustained period of hard numbers around business investment and trading, it is impossible to get an accurate picture of the economic impact of the vote to leave the EU’.
The GBP to GBP exchange rate converts at 1 today.
The pound conversion rate (against euro) is quoted at 1.168 EUR/GBP.
The GBP to USD exchange rate converts at 1.244 today.