Australian Dollar Exchange Rate Outlook: AUD/GBP, AUD/USD Trending Lower after IMF Remarks

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United States Dollars (USD)

The Australian Dollar declined against peers like the British Pound (AUD/GBP) and US Dollar (AUD/USD) during the South Pacific session as remarks from the International Monetary Fund (IMF) took a toll.

AUD/GBP, AUD/USD Exchange Rates Gain on Commodity Price Rise, Chinese Data

Earlier in the week the Australian Dollar broke out of its recent downtrend and recorded modest gains against a number of its currency counterparts thanks to the publication of ever-so-slightly better-than-forecast Chinese manufacturing PMI.

The South Pacific asset was also supported by an uptick in commodity prices and disappointing US Durable Goods Orders data.

IMF Warns that RBA May Need to Cut Interest Rates Again in 2015, Australian Dollar Declines: AUD/EUR, AUD/USD, AUD/GBP Lower

However, the Australian Dollar shed previous gains and softened across the board after the International Monetary Fund (IMF) stuck its oar in on the subject of interest rates and the Reserve Bank of Australia (RBA).

The Australian Dollar to US Dollar (AUD/USD) exchange rate fell to a low of 0.7682

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate fell to a low of 0.4885

The Australian Dollar to Euro (AUD/EUR) exchange rate fell to a low of 0.6869

The RBA has already adjusted borrowing costs this year but many industry experts have voiced the opinion that further action is needed in order to support domestic growth – and it seems the IMF is in agreement on this.

The institution insinuated that Australia’s ‘outperformance’ is coming to an end, and that ‘without reform, growth is likely to converge to a slower rate’.

But currency strategist Elias Haddad disagrees with the IMF and stated; ‘There are signs that further RBA rate cuts may not be required, supporting the Australian Dollar. Australia’s unemployment rate has trended lower over the past six months, employment growth has picked up and household consumption has been stronger than expected over the past few quarters.’

Australian Dollar to Pound Sterling (AUD/GBP), Australian Dollar to US Dollar (AUD/USD) Exchange Rate Forecast: Australian Job Vacancies, US Services PMI Ahead

While this week has been a little devoid of major economic releases, the AUD/GBP and AUD/USD exchange rates could experience modest movement overnight in response to the Australian Job Vacancies data for May.

During the European session the Confederation of British Industry’s Reported Sales number for June could be the biggest cause of AUD/GBP currency movement, although the report is of fairly low volatility.

AUD/USD fluctuations, on the other hand, may be more notable as the US is set to publish US Initial Jobless/Continuing Claims figures, Personal Income/Spending reports and the Markit Composite/Services PMIs. Upbeat US data could send the AUD/USD pairing to fresh lows.

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