Updated: GBP AUD Weakens as Housing Market Data Points to Further Slowdown in Property Sector
The British Pound spent Thursday morning stuck beneath opening levels versus the Australian Dollar (GBP/AUD) after the release of poor housing data for the UK.
According to the Royal Institution of Chartered Surveyors (RICS), a net balance of just 1% of surveyors and estate agents polled reported a rise in house prices.
However, the Australian Dollar has not been able to take full advantage of Sterling’s weakness, as the latest home loans data has shown an unexpected -2.3% drop in credit.
Updated: Pound Slumps as Banks Warn of Relocation Plans amidst Brexit Uncertainty
Sterling fell sharply against the Australian Dollar during the European session on Wednesday as a number of financial institutions warned that operations may be relocated from London to the US or Europe.
A report from the FT revealed that a group of Banks spoke to US commerce secretary Wilbur Ross last week and warned that the UK government’s lack of Brexit clarity was becoming a major issue.
Executives are reported to have suggested that thousands of jobs could be moved from London in the near future if banks are forced to implement their worst-case contingency plans.
Updated: Sterling Australian Dollar Exchange Rate Gains, But Boris Johnson Gaffe Weighs on Sterling
The Pound to Australian Dollar (GBP/AUD) exchange rate was able to extend gains on Tuesday as the Reserve Bank of Australia’s (RBA) latest policy announcement indicated that domestic interest rates are likely to remain on hold for some time.
The interbank GBP/AUD exchange rate achieved a high of over AU$1.72 on the news, but has since given up some ground as a result of disappointing UK retail sales data and political developments.
Prime Minister Theresa May is facing pressure to sack Foreign Secretary Boris Johnson after a gaffe about the activities of jailed Iranian-British aid worker Nazanin Zaghari-Ratcliffe. If the situation worsens today Sterling could be pressured lower.
The GBP/AUD exchange rate advanced modestly on Monday thanks to some comparatively supportive remarks from British Prime Minister Theresa May.
With the Reserve Bank of Australia (RBA) rate decision looming, further gains could be forecast for the currency pair.
Australian Dollar losses, meanwhile, occurred as a result of fears about domestic trade.
British Pound Exchange Rates Advance on May’s Brexit Optimism
The Pound has remained positive against the Australian Dollar today, thanks to residual trader optimism about a speech from Theresa May.
The PM has been attempting to reassure UK businesses that the government has Brexit negotiations in order. May said; ‘Our job now is to look to the future. The next ten years must see the beginning of a new chapter in the story of the British economy.’
Other UK news has been less encouraging, showing an alarming -12.2% decline in new car sales in October due to lower consumer confidence and the negative effects of the ongoing wage squeeze.
While the Australian Dollar has fallen against the Pound, the ‘Aussie’ has appreciated against other peers despite a report from the Department of Foreign Affairs and Trade indicating that tighter trade controls could bring over 250,000 job losses and between a -1.8% to -2.2% reduction in GDP.
GBP/AUD Exchange Rate Forecast to Move on RBA Rate Decision
This week, Pound Sterling/Australian Dollar exchange rate movement may be caused by Friday’s UK trade balance figures and production data.
Forecasts are for reduction in the ongoing UK trade deficit, a result which could be Sterling-supportive.
Elsewhere, however, there have been mixed forecasts for industrial, manufacturing and construction output levels.
Analysts predict a rise in September’s industrial production levels, but otherwise forecast lower levels of manufacturing and construction output.
Developments in Australia could prove more influential in terms of GBP/AUD movement, with the Reserve Bank of Australia (RBA) set to deliver its November interest rate decision.
The RBA is widely expected to leave rates untouched at 1.5% for the fifteenth month in a row, but any dovish comments from policymakers on the subject of Australia’s economic outlook would reduce the odds of rates being hiked in the near future and could send AUD exchange rates lower.
AUD Data Released This Week
7th November 03:30 AU Reserve Bank of Australia Interest Rate Decision
9th November 00:30 AU Reserve Bank of Australia Statement on Monetary Policy
9th November 09:30 UK Industrial Production (YoY) (SEP)
9th November 09:30 UK Manufacturing Production (YoY) (SEP)
9th November 09:30 UK Construction Production (YoY) (SEP)
9th November 09:30 UK Balance of Trade (SEP)