Risk appetite has been weaker so far this week, with the Australian Dollar struggling to hold onto its recent gains against the US Dollar
As of today, the British pound to Australian dollar exchange rate is seen to be around the 1.61645 level, higher than the daily open.
GBP/AUD headed back towards Tuesday night’s lows on Wednesday evening, as British markets became unimpressed with the UK government’s Brexit announcements once more.
A Wednesday speech from UK Brexit Secretary David Davis left investors disappointed after Davis indicated that the government still lacked a coherent Brexit plan, as well as uncertainty on the future of EU trade.
The appeal of the Australian Dollar improved in response to a solid uptick in October’s Westpac Consumer Confidence Index, which suggested greater optimism within the domestic economy.
Even so, the gains of the AUD/USD exchange rate could soon be curtailed if the Fed’s September meeting minutes encourage greater odds of an imminent interest rate hike.
Investors have largely ignored the modest dip in the NFIB Small Business Optimism Index, keeping the AUD/USD exchange rate on a downtrend.
Dovish commentary from Chicago Federal Reserve President Charles Evans also failed to diminish the bullish appeal of the US Dollar, despite his suggestion that there is no urgency in raising interest rates.
Despite the disappointment of last week’s Non-Farm Payrolls report, US Dollar (USD) exchange rates have recovered ground against rivals, with markets still confident that the Federal Reserve will raise interest rates before the end of the year.
In the wake of the second presidential debate investors have also become more confident in the prospect of a Clinton victory, something that is generally viewed to be the more stable outcome for the US economy and the ‘Greenback’.
This has seen the Australian Dollar to US Dollar (AUD/USD) exchange rate trending lower, with risk appetite generally weakening in response to the rally of the US Dollar.
Latest Australian Dollar/US Dollar Exchange Rates
On Saturday the US Dollar to British Pound exchange rate (USD/GBP) converts at 0.808
Today finds the pound to us dollar spot exchange rate priced at 1.237.
At time of writing the pound to new zealand dollar exchange rate is quoted at 2.101.
At time of writing the pound to canadian dollar exchange rate is quoted at 1.701.
NB: the forex rates mentioned above, revised as of 20th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
Tuesday’s raft of Australian data proved to be something of a mixed bag, offering the ‘Aussie’ (AUD) limited chance of a rally as August’s home loans data proved weaker than forecast.
Although the NAB Business Conditions Index showed a modest improvement this was also undermined by comments from the research team, who noted:
‘Beyond the near-term, however, the outlook is uncertain, particularly as the impetus from resource exports and the housing construction cycle start to fade. The headwinds, and persistently low inflation, are still expected to prompt the RBA to make two more 25bo cuts to the cash rate in H2 2017, to help firm up growth and stabilise the unemployment rate.’
The prospect of the Reserve Bank of Australia (RBA) returning to an easing bias has eroded the appeal of the Australian Dollar further, prompting the AUD/USD exchange rate to extend its slump.
AUD/USD Exchange Rate Predicted to Remain Under Pressure on Robust Labour Market Data
Demand for the US Dollar could strengthen further on Tuesday afternoon if the September Labour Market Conditions Index points towards continued resilience.
While this is a relatively low impact ecostat a stronger showing could nevertheless see the AUD/USD exchange rate slump further, with any positive US data likely to shore up market hopes of a 2016 Fed rate hike.
However, if the result offers a reminder of September’s disappointing payrolls print the US Dollar’s rally could falter somewhat.
Improved Westpac Consumer Confidence Could Boost Australian Dollar (AUD) Exchange Rate Demand
The appeal of the antipodean currency could pick up on Wednesday, however, if October’s Westpac Consumer Confidence Index demonstrates an improvement in domestic sentiment.
Also of interest will be the latest Australian credit card data, which could encourage investors to buy back into the ‘Aussie’ with another strong showing.
Even so, if markets remain in a predominantly risk-off mentality then the AUD/USD exchange rate is likely to struggle to capitalise on a stronger showing of domestic data.