Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Forecast: Will UK Inflation Fall?

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Pounds Sterling (GBP)

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate found itself trending lower in Monday’s European session after the release of disappointing UK and Australian data.

Australian Home Loans registered contraction of -0.7% in November after economists’ forecasts for 1.7% growth failed to materialise. October had recorded a small 0.2% expansion.

Australian Housing Market Slows, Australian Dollar (AUD) Exchange Rate Softens

JP Morgan economist Tom Kennedy stated: ‘The overall theme is that the housing market is slowing down a little bit from some very high levels. It’s still going in the right direction but things are cooling.’

The news of a housing market slowdown will be greatly appreciated by the Reserve Bank of Australia (RBA) which has previously come under pressure to cut interest rates further as the market began to overheat.

However, while the housing market may be cooling Australia’s economy is struggling in other areas and some investors anticipate a rate cut by the central bank at some point in 2015.

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

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate could fluctuate this week with the release of several pieces of important data. The Australian Employment Change statistic is out on Thursday and is expected to see a 5.0K rise in employment in December, following the previous jobs gain of 42.7K.

Moreover, the Australian Unemployment Rate figure is also scheduled for release and is expected to remain at 6.3% in December.

Monday saw some disappointment for the Pound Sterling exchange rate with the release of Lloyds Employment Confidence figure which slipped to -2 in December after November’s 1.

Tuesday will be a much more influential day for the Pound with the UK Consumer Price Index published. The non-core measure is expected to weaken from 1.0% to 0.7% in December. The Bank of England (BoE) recently forecast that annual inflation would fall below 1.0% in the near future, pushing the prospect of interest rate hikes out of the window for many investors.

The British Retail Consortium (BRC) will also release its Like-for-Like Sales figures on Tuesday and is forecasting 1.0% growth in December on the year.

Wednesday’s Australian Job Vacancies report could impact the ‘Aussie’ exchange rate slightly ahead of an influential day on Thursday and Australia’s key employment figures.

With no other pieces of significant data out for the UK or Australia in the rest of the week, the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is likely to move as a result of global developments and commodity price shifts.

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is presently trending in the region of 0.5399. The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is residing at 1.8532.

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