Australian Dollar Slips after Bullish AUD/GBP Run


One Pound Sterling (GBP)

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate soared from a three-month-low to a two-week-high earlier in the week as Pound sentiment plummeted and ‘Aussie’ sentiment soared, but AUD/GBP attempted a rebound on Thursday.

Australian Dollar (AUD) Drops on Profit-Taking

After trading below 0.49 earlier in the week, near a three-month-low, the AUD/GBP exchange rate shot up around 150 pips to reach a two-week-high of 0.5040. The pair has since slipped around -0.7%, and trended in the region of 0.4990 at the time of writing.

The Australian Dollar’s sentiment improved bullishly during Tuesday and Wednesday trade, after news earlier in the week revealed that Australian economy growth was far higher in Q1 than economists anticipated.

Tuesday’s net exports of GDP report came in with an unexpectedly high score of 1.10 from 0.00, almost doubling the expected 0.70.

Following this, Wednesday’s Q1 Gross Domestic Product (GDP) figures revealed monthly growth from 0.6% to 1.1%, beating forecasts of 0.8%, while the yearly score improved from 3.0% to 3.1% despite being expected to slip to 2.8%. This score may have been partially the result of a sudden surge in the prices of iron ore, Australia’s main export, earlier in the year.

However after reaching its high point on Thursday morning of the Asian trade session, the ‘Aussie’ began to drop.

Data released on Thursday morning did little to extend the Australian Dollar’s gains. Retail sales halved from 0.4% to 0.2% despite a predicted slow to 0.3%. On the other hand, news that the Australian trade deficit had lightened from -1971m to -1579m despite a projected drop to -2100m may have slowed its descent.

Pound Sterling (GBP) Bears Calm after Two Days of Plummets

The Pound appeared to gain some footholds during Thursday trade after free falling for around half a week.

Sterling investors began to sell the currency en masse during Tuesday’s London session in response to the latest EU referendum polls and bets, with most poll organisers revealing that support for the ‘Leave’ campaign had strengthened considerably in the last week.

This has been due to an increase of immigration rhetoric from the ‘Leave’ campaign, looking to address voter concerns on the recent migrant crisis across Europe.

However, as Labour leader Jeremy Corbyn picked up his party’s own ‘Leave’ campaigning on Thursday, Sterling’s plummet slowed.

Investors paid little attention to recent data, as the Pound continued to drop on Wednesday despite an unexpected positive Manufacturing PMI score of 50.1. Thursday’s Construction PMI dropped to 51.2 despite being expected to remain held at 52.0.

Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Forecast: UK Composite PMI Due Friday

Britain’s final May PMI scores are set for release during Friday’s session, and could influence movement in the increasingly volatile Pound if ‘Brexit’ debates remain calmer.

The expected prints include Services, Britain’s most vital economic sector, as well as the overall Composite PMI score. Services are currently expected to improve from 52.3 to 52.5, while Composite is expected to climb from 51.9 to 52.3.

As Manufacturing printed above expectations but Construction printed poorly, the Composite score still has potential to improve.

Australian data will be relatively quiet, though the ‘Aussie’ may react in response to the AiG’s latest performance of service index report, which scored 49.7 in April.

As always, the Australian Dollar will continue to fluctuate in response to risk sentiment, and may continue to be easily pressured as prices of Australia’s most lucrative commodity, iron ore, continue to drop.

At the time of writing, the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate trended in the region of 0.5000, while the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate traded at around 2.0000.

« Previous Story

Australian Dollar (AUD) Movement Mixed against US Dollar (USD) after Latest Metal Prices and Fed Rate Hike Predictions

Next Story »

Australian Dollar (AUD) Appreciates against Euro (EUR) after Positive AU Services Printing


Disclaimer: Currency-Converter.com.au 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. Currency-converter.com.au 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. Currency-converter.com.au 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.