The Australian Dollar Pound (AUD GBP) exchange rate has become increasingly unstable over the last two days as iron ore prices fluctuate violently.
Australian Dollar Pound (AUD GBP) Beholden to Commodity Chaos
The Australian Dollar (AUD) has struggled to advance in recent days as prices for its largest export have become increasingly erratic over the last week.
After starting the week at over $80 a tonne, iron ore plummeted over 10% in the middle of the week as China brought in new regulations to help quell the rampant market speculation on Chinese commodity futures.
However this appeared to briefly deter investors as come Thursday speculation had returned with a vengeance, leading to iron ore surging by 8.7% in a single session – its best one-day gains since April.
Pound Sterling (GBP) Bolstered by Surprise Growth in Construction
Pound (GBP) exchange rates were buoyed by an unexpected rise in the UK’s construction sector output on Friday as Markit reported that the UK’s Construction PMI rose from 52.6 to 52.8 in November, beating expectations that it would slide to 52.2.
While growth reached its highest levels since the UK’s vote for ‘Brexit’, there was some concern over the steep rise in prices as costs hit a new five-year high as the falling value of Sterling made importing materials more expensive.
AUD GBP Forecast: RBA Rate Decision Unlikely to be Eventful
The AUD GBP exchange rate is unlikely to be impacted by the Reserve Bank of Australia’s latest rate decision as the Bank is widely predicted to hold rates at 1.5% after some positive growth in the Australian economy over the last month.
Meanwhile the Pound could plummet next week if the UK Supreme Court overrules a High Court judgement that the government could not start the ‘Brexit’ process without a vote from parliament as markets fear this could lead to a ‘hard Brexit’.
Current Interbank Exchange Rates
At the time of writing the AUD/GBP exchange rate was trending around 0.58 and the GBP/AUD exchange rate was trending around 1.69.