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GBP/AUD Exchange Rate Falls despite UK Services Expanding

Last week’s high: AU$1.8650

Last week’s low: AU$1.8315

 

Australian Dollar Rises despite Sharp Fall in Building Approvals

On Tuesday, China’s Caixin manufacturing PMI slipped below expectations damaging sentiment in the risk-sensitive ‘Aussie’.

However, further face-to-face US-China discussions continued, which were labelled by US Trade Secretary Steven Mnuchin as ‘productive’.

This caused an increase in risk sentiment which provided support for the Australian Dollar.

Meanwhile, on Thursday data revealed Australian new home sales had stabilised, as sales fell by -0.1% suggesting that the housing slowdown is not getting any worse at this point.

The Pound Australian Dollar exchange rate began to climb on Tuesday despite a higher-than expected Australian AiG Performance of Mfg Index.

The pairing continued to rise as the Bank of England (BoE) left interest rates unchanged on Thursday.

The bank upgraded its UK growth forecasts to 1.5% from a previous prediction of 1.2% which helped Sterling a little.

On Friday data revealed that Australian building approvals fell sharply in March as the unusually large jump in apartment approvals from February was reversed, with building permits falling -15.5%.

Meanwhile, the UK service sector edged up from March’s 32-month low to 50.4 in the latest PMI.

Firms noted that Brexit uncertainty had a negative influence, which likely weighed heavily on the Pound causing the pairing to slide at the end of last week’s session.

 

AUD Outlook: Will a Dovish RBA Weigh on the Australian Dollar?

Looking ahead to Tuesday, the Australian Dollar (AUD) could slide against the Pound (GBP) following the release of the Reserve Bank of Australia’s (RBA) interest rate decision.

It is expected that the RBA will leave interest rates unchanged at 1.5%, however if the rate statement is overly dovish and hints at a possible rate cut in the future the ‘Aussie’ could slide.

On Friday the Australian Dollar could slip further following the release of Australian home loans data.

If the number of home loans is not as high as forecast in March, the ‘Aussie’ could come under pressure.

Later on Friday the Pound could rise following the release of preliminary Q1 2019 GDP.

If GDP rises more than expected, the Pound Australian Dollar (GBP/AUD) exchange rate could rise.

 

Key Events

6th May

23:30   AUD AiG Performance of Construction Index (April)

 

7th May

02:30   AUD Retail Sales (March)

02:30   AUD Trade Balance (March)

05:30   AUD RBA Interest Rate Decision

05:30   AUD RBA Rate Statement

 

8th May

00:01   GBP Like-for-like Retail Sales (April)

 

10th May

02:30   AUD RBA Monetary Policy Statement

09:30   GBP GDP (Q1)

09:30   GBP Manufacturing Production (March)

09:30   GBP Industrial Production

 

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To keep up to date with the Australian Dollar, visit the AUD blog in our Currency News section.

Alastair Archbold
Currency Trader
T: 01442 892 062

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