Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Forecast to Soften on Bearish Commodities

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Pounds Sterling (GBP)

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate dived by around -0.22% on Friday.

With lower oil prices driving the commodities market into sustained declination, the Australian Dollar has been maintaining a bearish relationship with most of its major peers. The Pound Sterling, meanwhile, is generally trending lower against the majority of its most traded currency rivals after the solitary UK data publication printed disappointingly.

The Australian Dollar to Pound Sterling exchange rate is currently trending in the region of 0.5336.

‘Aussie’ Dollar Softens on Commodities

The commodities market has endured a long period of declination, led by rapidly falling oil prices. As a commodity-correlated currency, the Australian Dollar has fallen in response to the drop-off in oil. Brent extended losses from a four-year low after Saudi Arabia offered Asian consumers huge discounts on its crude, fuelling speculation that it’s defending market share.

‘It seems what the Saudis want, the Saudis are going to get,’ stated Phil Flynn, a senior market analyst at Price Futures Group in Chicago.. ‘We’re going to see prices continue to be under pressure. It is still game on.’

Compounding the ‘Aussie’ declination was a disappointing result from Performance of Construction Index, which ticked lower from 53.4 to 45.4. An increase in Australian foreign reserves hasn’t been enough to micrify the impact of bearish commodities. Foreign Reserves increased from A$53.6 billion to A$61.7 billion in November.

Australian Dollar Exchange Rate Declines on Stronger US Dollar

As the US Dollar sustains a bullish run, higher-yielding currencies have declined. After the Federal Reserve Beige Book indicated that employment had improved significantly, futures traders supported the ‘Greenback’ (USD) amid speculation that Friday’s non-farm payrolls data will impress.

‘The underlying theme today is that markets are expecting a dovish tone from the ECB and a bullish US jobs report,’ said Joe Manimbo, senior market analyst at Western Union. ‘People are buying the Dollar ahead of what they think will be Dollar-positive outcomes to these events.’

The Australian Dollar to Pound Sterling exchange rate has dropped to a low today of 0.5333.

Pound Sterling Exchange Rate Edges Lower on Inflation Outlook

A distinct lack of influential domestic data has seen the Pound subject to changes in foreign currency movement on Friday. A slight declination in the British currency can be attributed to the Bank of England (BoE) inflation outlook for the next 12 months, which dropped from 2.8% to 2.5%.

Softer inflation expectations ‘buys the BOE time before needing to raise rates’ said Deutsche Bank AG economist George Buckley.

‘Respondents said the current rate of inflation was 2.8%, compared with 3.4%when asked in August. Consumer prices actually rose an annual 1.3% in October, […] the pace of increase may fall below 1%in December. That would force BOE Governor Mark Carney to write to Chancellor of the Exchequer George Osborne explaining why it has strayed more than a percentage point from the BOE’s 2% target,’ stated Fergal O’Brien, writing for Bloomberg News.

Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Forecast to Soften

With the commodities market showing no signs of rebounding from declination, the Australian Dollar to Pound Sterling exchange rate is likely to continue trending lower.

The Australian Dollar to Pound Sterling exchange rate climbed to a high today of 0.5333.

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