The Pound Sterling to Euro (GBP/EUR) and Pound Sterling to New Zealand Dollar exchange rates were trending lower in Tuesday’s European trading, while the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate fell after the Reserve Bank of Australia (RBA) cut interest rates again.
— CommSec (@CommSec) May 5, 2015
Unusually, rather than pushing the Australian Dollar exchange rate lower, the OCR cut has had the opposite effect, seeing the Australian Dollar to US Dollar (AUD/USD) exchange rate hit 0.79. ANZ was the first of the major banks to cut its mortgage rate.
The Pound Sterling to Euro (GBP/EUR), Pound Sterling to New Zealand Dollar (GBP/NZD) and Pound Sterling to Australian Dollar (GBP/AUD) exchange rates could all experience fluctuations during next week’s trading, with highly influential data due for release as well as the result of the upcoming UK general election.
Pound Sterling to Euro (GBP/EUR) Exchange Rate Forecast
The Pound Sterling to Euro (GBP/EUR) exchange rate could be in for some swings on Monday with the release of Sentix’s Eurozone Consumer Confidence figure.
Tuesday’s European Commission economic forecasts could be a major influence in the way the Pound Sterling to Euro (GBP/EUR) exchange rate trades, especially after the European Central Bank (ECB) recently introduced quantitative easing (QE).
Wednesday will see the release of Markit’s UK Services and Composite Purchasing Managers Indexes (PMI), as well as the Eurozone Retail Sales figure. German Factory Orders, Markit’s German Construction PMI, and German and Eurozone Markit Retail PMIs will follow on Thursday.
Friday will close the week for Eurozone data with the release of German Industrial Production and German Trade Balance numbers.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Forecast
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is forecast for a tumultuous ride in the week ahead with so much influential Aussie data scheduled for release.
Tuesday will kick-start the week with the release of the Australian AiG Performance of Service Index and Australian Trade Balance ecostats. However, shortly after, the Reserve Bank of Australia (RBA) will announce its latest interest rate decision.
The RBA’s interest rate decision has been highly speculated about and therefore the Australian Dollar to Pound Sterling (AUD/GBP) exchange rate is forecast for some major movement in the lead-up to the decision, as well as after the announcement.
Thursday will be another major day for the AUD/GBP currency pair with the release of Australian Employment Change and Unemployment Rate figures. Australian Employment Change is forecast to come in at 3.0K in April, after March’s 37.7K, while the Australian Unemployment Rate is predicted to climb from 6.1% to 6.2%.
However, there has been some dispute into the reliability of Australian employment figures in recent months, causing investors to tread carefully around them.
ANZ official Riki Polygenis commented: ‘Calls for a cut next week were louder overnight. [Other economists are] echoing our views that AUD resurgence and the weak outlook for growth and wages will require a response. Questions about the effectiveness of cuts at this point in the cycle remain, but the RBA has little option but to try.’
‘While surging house prices remain a risk following the surge in investor housing credit data yesterday, the use of non-monetary measures should help, particularly if we do see a step-up in supervisory intensity from APRA.’
— David Scutt (@David_Scutt) May 5, 2015
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate could be in for major movement on Tuesday with the release of the New Zealand Unemployment Rate and Employment Change ecostats.
Any upbeat labour market ecostats could feasibly bolster the New Zealand Dollar exchange rate as investors reassess the likelihood of a Reserve Bank of New Zealand (RBNZ) interest rate cut. The RBNZ recently hinted that a cut to the official cash rate could occur in the near future, a development that saw the ‘Kiwi’ tumble.
Any central bank statements from the RBA, RBNZ or Bank of England (BoE) could have a major impact on the way in which the Pound Sterling to New Zealand Dollar (GBP/NZD), Pound Sterling to Australian Dollar (GBP/AUD) and Pound Sterling to Euro (GBP/EUR) exchange rates trade.
Commerzbank official Lutz Kapowitz commented: ‘Rather than using up its opinions by cutting rates right away, the RBNZ is using the announcement to bring NZD under notable pressure. Of course it will have to take action eventually, otherwise its credibility would soon be lost. Contrary to many other central banks the RBNZ still has a number of options – at 3.5% the key rate is by far the highest among the G10 currencies. In a situation such as this I would have not bet on a stronger ‘Kiwi’.’