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

  • Posted on

Fifty Pounds Sterling (GBP)

The Australian Dollar to Pound Sterling exchange rate firmed on Thursday as riskier commodity based assets found support from a rather dovish Federal Reserve policy meeting.

Those gains are forecast to be short-lived however, as concerns over falling commodity prices and geopolitical tensions remain.

The ‘Aussie’ strengthened against most of its most traded peers earlier in the session as the Federal Reserve policy meeting revealed that the world’s largest central bank remains cautious on when to increase interest rates. The policy meeting cased investors to speculate that the Fed has no plans to raise rates anytime soon with the most optimistic now not expecting a rate rise until April next year at the earliest.

The Federal Reserve chair, Janet Yellen, explained that “patient” meant the bank was unlikely to raise rates for “at least a couple of meetings”.
That would mean April next year at the earliest.

The dovish comments offered support to the ‘Aussie’ and other commodity and emerging market assets.

As the session progressed, the Pound began to recover earlier lost ground as domestic UK data buoyed the currency.

According to the Office for National Statistics (ONS), retail sales including fuel increased by 1.6% on a monthly basis to make the biggest increase of the year so far. Sales excluding fuel rose by 1.7% month on month. On an annual basis, sales excluding fuel jumped by 6.9% and with fuel rose by 6.4%.

‘The market was taken by surprise. Retail sales were extremely strong. However, markets aren’t anticipating an interest rate rise until 2016 and even strong data isn’t enough to change that,’ said Jane Foley, senior forex strategist at Rabobank.

The Australian Dollar is forecast to resume its downward trend against the Pound, US Dollar and other major peers as iron ore prices are expected to fall further.

Iron ore prices recently fell to the lowest levels in five years on signs that China, Australia’s largest trading partner, is experiencing a slowdown and sapping demand for the commodity.

China’s GDP growth outlook in 2015 was revised down from a forecast of 7.3% in March. Data released today also showed that new-home prices in China fell month on month in November in 67 out of 70 cities tracked by the country’s statistics bureau.

Also putting pressure on the ‘Aussie’ is positive data releases out of the USA. Consumer confidence in the nation increased last week to its highest level in seven weeks due to lower fuel prices.

« Previous Story

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

Next Story »

Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Softens on Risk Aversion

Disclaimer: and its data provider, TorFX, make no claims regarding the validity or exactness of the information provided in on this site and will not be held liable for any use, interpretation, or other implementation of the information provided. make no warranties, express or implied, as to results to be obtained from use of such information, and make no express or implied warranties of condition, quality, performance, merchantability or fitness for a particular purpose or use. shall not have any liability for the accuracy of the information contained in the services provided or ommissions there in which are made available on a free, as-is basis. None of the aforementioned parties shall be liable for any third party claims or losses of any nature, including, but not limited to, lost profits, punitive, consequential, special, incidental, indirect or similar damages even if advised of the possibility of such damages. Rates offered are interbank rates and may not be the same as offered by your financial institution, and do not include commissions. Rates shown on this site will vary from those provided by TorFX or other providers linked to from this site.