Fears of Increased US Competition Push Australian Dollar to Pound (AUD/GBP) Exchange Rate Lower
The Australian Dollar (AUD) has made a minor loss against the Pound (GBP) today, falling to an exchange rate of £0.5596.
This is a step down from the week’s best AUD/GBP exchange rate of £0.5628, but better than the recent low of £0.5569.
Demand for the Australian Dollar has fallen recently because of signs that the US Federal Reserve could be set on a path of continued interest rate hikes.
Higher US interest rates mean that the US Dollar could be a more appealing currency in the future, which will conversely devalue the Australian Dollar.
Global commodities are often priced in US Dollars, so there is an additional danger of the Australian mining sector facing difficulties in future.
The latest signs that higher US interest rates are incoming have come from Federal Reserve Chair Jerome Powell, who has backed higher rates at a conference in Portugal.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Rises on Surprise Manufacturing Orders Growth
Today has been better for Pound (GBP) traders, with the UK currency appreciating against the Australian Dollar (AUD) and other peers because of industrial data.
The Confederation of British Industry (CBI) industrial orders measure for June has risen from May’s -3 points to 13, beating the expected 1 point result.
Anna Leach, CBI Head of Economic Intelligence, said of the results:
‘The recovery in orders and a return to bumper growth in production suggests the lull in manufacturing activity may be over.
‘While risks to demand persist from Brexit and escalating global trade tensions, firms can work with the Government to nurture a pro-enterprise environment that helps UK growth to shift up a gear.
‘There is much within the UK’s control that can be acted on now to lift UK productivity, from building a third runway at Heathrow to investing in the skills of the future.’
Australian Dollar to Pound Exchange Rate Forecast: Will AUD/GBP Rise on Supportive RBA Bulletin?
The last major Australian economic data of the week will come later today, when the latest Reserve Bank of Australia (RBA) bulletin is released in the morning.
This document takes a snapshot of the AU economy, summing up previous economic development while also looking at potential future movements.
If the bulletin contains optimistic predictions for the Australian economy in the rest of 2018, the AUD/GBP exchange rate could rise.
There will also be UK central bank news tomorrow, with officials meeting to discuss monetary policy.
No interest rate change is expected, but BoE policymakers could still trigger a GBP/AUD exchange rate rise if they hint at a UK interest rate hike later in 2018.