During Tuesday’s European session, the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate edged higher by around 0.14%.
After data out of China showed inflation had dropped beyond expectations, the Australian Dollar softened versus most of its major peers. The depreciation was compounded by the US Dollar appreciation and rocky market sentiment amid geopolitical struggles in Greece. Mixed results from domestic data publications also weighed on demand for the Oceanic currency. The declination was somewhat slowed, however, thanks to iron ore prices rising amid slower output from China.
The Pound, meanwhile, dived versus its most traded rivals despite data showing the trade deficit narrowed in April. The depreciation can be linked to HSBC announcing that 8,000 UK jobs are to be slashed and that they plan on relocating the headquarters from the UK.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate was trending in the region of 0.5017.
Australian Dollar (AUD) Exchange Rate Forecast to Tick Higher against the British Pound on Iron Ore Prices
Australian economic data produced mixed results during Tuesday’s Australasian session. April’s Home Loans bettered the median market forecast of a -2.0% declination, with the actual result having advanced by 1.0%. April’s Investment Lending, however, came in at 2.6% which was a significant drop from the previous growth of 7.1%. This data was overshadowed, however, by data from China. May’s Consumer Price Index missed the median market forecast of a drop from 1.5% to 1.3% annually, with the actual result falling to 1.2%. In addition, May’s annual Producer Price Index held at -4.6% despite the market consensus of a slight increase to -4.5%.
The ‘Aussie’ (AUD) avoided a larger depreciation, however, thanks to rising iron ore prices. ‘So far demand from mills is still good, given their low inventories and offers from traders are still limited,’ said a Shanghai-based iron ore trader. ‘But demand is not as strong as we’ve seen recently.’
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate dropped to a low of 0.4994 today.
Pound Sterling (GBP) Exchange Rate Forecast to Soften versus the ‘Aussie’ after HSBC Cut UK Jobs
Despite the fact that UK trade balance data printed positively on Tuesday, the Pound slumped versus many of its peers. April’s Trade Deficit narrowed from -£3.093 billion to -£1.202 billion, with Trade Balance Non EU and Visible Trade Balance both bettering estimates.
However, the British asset didn’t appreciate in response to the data thanks to news from HSBC, who are looking to cut 8,000 British jobs and move the headquarters away from the UK. ‘The cuts provide significant headroom for the group to fund asset growth in Asia and absorb RWA inflation, whilst protecting its ability to pay a progressive dividend,’ said Gurpreet Singh Sahi, analyst at Goldman Sachs.
Dominic Hook, Unite national office for finance, said; ‘Unite are seeking to meet with UK chief executive Antonio Simoes as soon as possible to demand that any redundancies are through voluntary means or managed through natural attrition. After all the scandals of recent years, frontline staff have suffered time and time again as they are forced to pay for the mistakes of others with their jobs, their terms and conditions and their reputation.’
Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Forecast to Hold Steady
Given the absence of further domestic data publications to provoke changes for the pairing, the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is likely to hold gains for the remainder of Tuesday’s European session. Wednesday’s European session ought to see heightened AUD/GBP volatility with several British data publications due for release.
The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate climbed to a high of 0.5025.