GBPAUD Strength following weak Aussie Retail Sales

GBPAUD AUDGBP Australian Dollar Forecast Best Rates

The GBPAUD exchange rate picked up to above 1.59 again this morning following weaker than expected Australian retail sales which adds more pressure for further interest rate cuts by the Reserve Bank of Australia.  The data release also weakened the New Zealand Dollar. Next week sees the RBA meeting to decide on whether or not to cut interest rates again. Many economists expect a 25 basis point cut with 1 in 4 pricing in a 0.5% rate cut we could see Sterling break through the 1.60 mark next week if the economists are correct. However, it was not all bad for the Australian economy as construction rose to 5.5% in Q1 higher than expectation of 3% fore-casted.

With rising speculation that Greece may leave the Euro Zone the antipodean currencies have been hit hard by the European Debt Crisis. With Spain experiencing uncertainties surrounding the proposed bailout of Bankia and the Bank of Spain Governor leaving office a month early this instability is causing fears as to what may happen to both GBPAUD & GBPNZD. Yesterday the decline in German consumer prices for May at -0.2% caused EURUSD to hit the lowest level since July 2010 and investors are showing caution as to whether or not to place funds into the Australian Dollar particularly if there’s an interest rate cut round the corner.

On Friday all the focus will be on the official China Manufacturing PMI date. This will provide us with some insight into global manufacturing confidence and the expectation is for a third consecutive monthly decline. If the Chinese government looks to stabilise growth by unleashing a USD$300bn domestic stimulus package we could see a better second half of the year. Initially if the PMI data is poor we could see strength for GBPAUD and a break through to 1.60.

If you have any questions about how to achieve commercial exchange rates as a private individual please do no hesitate to contact me directly Tom Holian teh@currencies.co.uk quoting ‘AUSTRALIAN DOLLAR FORECAST’ in the subject title.