Australian Dollar Exchange Rate Forecast: AUD/USD, GBP and EUR Stronger after Chinese Stats

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Australian Dollars (AUD)

The Australian Dollar to US Dollar (AUD/USD) exchange rate rallied to a six-day high during the Australasian session as the pace of Chinese third quarter growth came in slightly above forecast.

Although the rate of expansion in the world’s second largest economy did ease from 7.5% to 7.3% on a quarter-on-quarter basis, growth of 7.2% had been anticipated.

The report triggered a rally in commodity-driven and higher-risk currencies and prompted this response from currency strategist Annette Beacher; ‘GDP growth in 2012 and 2013 was 7.7%, and 2014 looks set to achieve the official government target of 7.5%. Selective provision of liquidity by the Peoples Bank of China keeps hopes alive for more broad-based stimulus, but we expect these to remain unfulfilled.’

AUD/USD Gains 0.3%

The strength in the AUD/USD exchange rate was uncompromised by the Reserve Bank of Australia’s policy meeting minutes, despite their pessimistic overtones. The only US report with the potential to inspire Australian Dollar to US Dollar movement today is the nation’s Existing Home Sales report.

The Australian Dollar to US Dollar (AUD/USD) exchange rate is currently trending in the region of 0.8803.

AUD/GBP Trends Higher

On Tuesday the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate rallied to a high of 0.5430 as investors overlooked the Reserve Bank of Australia’s downbeat policy meeting minutes and focused instead on the comparatively upbeat Chinese growth and industrial production figures.

In the minutes the RBA once again reiterated that the Australian Dollar remains high by historical standards.

The central bank also stated; ‘Growth in the global economy was continuing at a moderate pace. Commodity prices, in particular iron ore prices, had declined over the past month. This was consistent with both the ongoing increase in iron ore supply and further weakening of the Chinese property market, which is an important source of demand for steel. Global financial conditions remained very accommodative and the Australian Dollar had depreciated somewhat, largely reflecting a broad-based appreciation of the US Dollar.’

However, with the rate of industrial production and GDP growth in China (Australia’s main trading partner) exceeding forecasts, the Australian Dollar was able to trend higher.

The AUD/GBP exchange rate went on to fluctuate following the release of UK public finance figures.

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is currently trending in the region of 0.5435.

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