The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate dived by around -1.04% on Thursday afternoon.
After the Federal Reserve hinted that they would raise rates in 2015, the resultant US Dollar surge caused the ‘Aussie’ (AUD) to soften versus most of its major peers. Additional losses can be attributed to declination in oil, gold and iron ore. Speculation that the Reserve Bank of Australia (RBA) will cut rates at their next policy meeting is also weighing on demand for the South Pacific asset.
The Pound Sterling, meanwhile, is trending lower versus most of its major rivals after domestic data showed house prices and reported sales declined in January.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trending in the region of 0.5156.
As explained above, the US Dollar surge (following hints of a 2015 rate hike by the Fed) caused an initial downtrend for the Australian Dollar. The Fed’s suggestions also weighed on gold prices which contributed to the ‘Aussie’ declination.
‘Positive sounds out of the Fed hurt,’ Georgette Boele, an analyst at ABN Amro Bank NV, said by e-mail. ‘When precious metals get under pressure, it is often not a small move.’
Speculation that the RBA will cut the cash rate in their next policy meeting also caused a large declination. ‘The key driver for these central banks is increasing downside risks to global inflation and growth,’ said Su-Lin Ong, head of Australian economic and fixed-income strategy at Royal Bank of Canada in Sydney. ‘Canada talked about an insurance cut and pointed at energy, you substitute that in Australia for iron ore and dairy in New Zealand. It’s no coincidence that the commodity nations’ central banks are shifting rapidly in policy assessments.’
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate dropped to a low today of 0.5131.
After British data produced negative results on Thursday, the Pound declined versus most of its major competitors. House Prices softened in January as well as CBI Reported Sales.
‘The further moderation in the pace of price growth is unsurprising, given the slowdown in housing market activity in recent months,’ said Nationwide’s chief economist, Robert Gardner, who added that the reasons for the slowdown were unclear.
Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Forecast to Hold Losses
Given that the Australian Dollar is feeling downward pressure from various sources, the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is likely to hold losses for the remainder of Thursday.
The Australian Dollar to pound Sterling (AUD/GBP) exchange rate reached a high today of 0.5217.
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