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Pound Sterling to Australian Dollar Exchange Rate closing in on 1-Month High
Published: 27 Nov at 11 AM Tags: Pound Sterling, Euro Exchange Rate, Dollar Exchange Rate, Australian Dollar Exchange Rate, Currency Exchange, Euro Crisis, Yen Exchange Rate, UK, Economy,
The Pound to Australian Dollar exchange is strengthening towards a monthly high as the ‘Aussie’ continues to receive a beating on the back of tumbling iron ore prices and negative rhetoric from the Reserve Bank of Australia.
The Australian Dollar also weakened against the US Dollar by falling to the 84 cents region. The ‘Aussie’ has been driven to a new low by a number of factors including the 1.2% fall in the price of iron ore, Australia's biggest export to China.
Iron ore is Australia’s most traded export so any sharp declines will drag the ‘Aussie’ lower. So far this year the value of the commodity has slumped by 48% this year.
“The Aussie is getting hammered; it hit a four-year low against the greenback, fuelled by falling iron ore prices that have tanked to a low not seen since 2009. Then Reserve Bank of Australia (RBA) deputy governor Philip Lowe stuck the fork in by suggesting the RBA was open to rate cuts. With positive sentiment spurred by the People’s Bank of China’s rate cut fading fast while fear rises over the enduring strength of the Chinese economy, traders are selling the Aussie; unwinding their EUR/AUD and AUD/JPY positions.” said Stephen Innes, Senior Trader, OANDA Asia Pacific.
The Pound received support after GDP data confirmed that the UK economy expanded by 0.7% in the third quarter of 2014. On a year on year basis the economy expanded by 3%, adding to the 3.2% expansion seen in the second quarter of 2014.
The Australian Dollar is forecast to make more declines over the coming weeks and months as the RBA downgraded its forecasts for the currency. If the RBA appears to edge closer to cutting, interest rates in an attempt to invigorate the nation’s economy we could see the ‘Aussie’ get crushed against its major peers.
“Traders should tread cautiously. We are heading into the U.S. Thanksgiving long weekend. That means liquidity will be thin and profit taking becomes the order of the day. In the meantime, local traders will keep an eye out for the Private Capital Expenditures report. It’s the primary domestic focus for this week,” Innes added.
In the short term the ‘Aussie’ will remain under heavy pressure as market attention turned to the release of a number of marker moving reports out of the USA.
The Australian Dollar also weakened against the US Dollar by falling to the 84 cents region. The ‘Aussie’ has been driven to a new low by a number of factors including the 1.2% fall in the price of iron ore, Australia's biggest export to China.
Iron ore is Australia’s most traded export so any sharp declines will drag the ‘Aussie’ lower. So far this year the value of the commodity has slumped by 48% this year.
“The Aussie is getting hammered; it hit a four-year low against the greenback, fuelled by falling iron ore prices that have tanked to a low not seen since 2009. Then Reserve Bank of Australia (RBA) deputy governor Philip Lowe stuck the fork in by suggesting the RBA was open to rate cuts. With positive sentiment spurred by the People’s Bank of China’s rate cut fading fast while fear rises over the enduring strength of the Chinese economy, traders are selling the Aussie; unwinding their EUR/AUD and AUD/JPY positions.” said Stephen Innes, Senior Trader, OANDA Asia Pacific.
The Pound received support after GDP data confirmed that the UK economy expanded by 0.7% in the third quarter of 2014. On a year on year basis the economy expanded by 3%, adding to the 3.2% expansion seen in the second quarter of 2014.
The Australian Dollar is forecast to make more declines over the coming weeks and months as the RBA downgraded its forecasts for the currency. If the RBA appears to edge closer to cutting, interest rates in an attempt to invigorate the nation’s economy we could see the ‘Aussie’ get crushed against its major peers.
“Traders should tread cautiously. We are heading into the U.S. Thanksgiving long weekend. That means liquidity will be thin and profit taking becomes the order of the day. In the meantime, local traders will keep an eye out for the Private Capital Expenditures report. It’s the primary domestic focus for this week,” Innes added.
In the short term the ‘Aussie’ will remain under heavy pressure as market attention turned to the release of a number of marker moving reports out of the USA.
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Source: moneytransfer.co.uk