Australian and NZ Dollar Outlook vs Pound Sterling and US Dollar: Exchange Rate Markets Latest

This is particularly relevant agaisnt the pound sterling (GBP) as the UK currency continues to battle with the re-rating on the timing of UK interest rate rises.

For reference the following levels are witnessed at the time of writing (Sunday 17th):

• The pound to Australian dollar exchange rate (GBP/AUD) is at 1.7926.
• The pound to New Zealand dollar exchange rate (GBP/NZD) is at 1.9683.

Please note that all quotes here are taken from the spot markets - your bank will affix a spread at their discretion. But, an independent FX provider will seek to undercut your bank's offer, thereby delivering up to 5% more FX. Find out more here.

Rebound in New Zealand and Australian dollars inproves the outlook

"The rebound in the Australian and New Zealand dollars raised the possibility of a bottom in AUD/USD and NZD/USD. While the turn in AUD looks a lot stronger than NZD, both currencies benefitted from the weaker U.S. retail sales report, stronger Australian consumer confidence and improvement in risk appetite," says Kathy Lien at BK Asset Management.

The New Zealand dollar continued to consolidate near its 2 month lows against the USD.

The decline in credit card spending during the month of July adds to the back-to-back disappointments in New Zealand data that should keep the RBNZ on hold for the rest of the year.  

Outlook for the pound against the Australian dollar

The Bank of England’s willingness to remain on hold for the remainder of the year despite a strong economy is weighing heavily on the pound.

The market had high hopes for the mid-August inflation report, but the BoE is clearly reluctant to raise rates in the face of a soft labour market

"The ensuing blow to the market’s timetable for interest rates in England resulted in a big sell-off in the GBP," says Chris Tedder at Forex.com.

Tedder reckons the longer-term prospects for the GBP/AUD are starting to look shaky as a result of the recent negative price action:

"This sell-off has sent GBPAUD to the base of its long-term trading channel. While we are yet to see it break through this important support level, which would be a bearish indicator, there are some technical indicators which point to further downside.

"We are waiting to see if RSI possibly precedes price by breaking a similar support zone. If not, we may see price begin to push back towards the top of its long-term trading channel."

With no major data out of the UK for much of the remainder of August we would be surprised if any major uptrend in the sterling / Aus dollar exchange rate shaped up.