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Australian Dollar Drops after RBA Speech

Yesterday’s high: AU$1.7554

Yesterday’s low: AU$1.7448

GBP/AUD Close to 5-Month High

The Pound to Australian Dollar (GBP/AUD) exchange rate remained close to a five-month high on Monday thanks to Brexit speculation.

Rumours circulated about the government changing tact in Brexit talks and offering the EU more money for the ‘divorce bill’.

While not officially confirmed, it was theorised that this would finally get negotiations moving.

The Australian Dollar then weakened during the Australasian session as the Reserve Bank of Australia (RBA) issued warnings about wage growth.

AUD Outlook: Pre-Budget GBP/AUD Volatility Ahead

Before Wednesday’s budget, the Pound might see last-minute movement as a result of today’s government borrowing and industrial activity data.

The borrowing deficit is tipped to expand, but industrial orders are expected to increase slightly.

The Pound might rise as the positively-forecast CBI data is considered the more impactful news.

Sticking with the RBA, the Australian Dollar could be affected by an imminent speech from RBA Governor Philip Lowe.

Lowe will be speaking at the Australian Business Economists (ABE) annual dinner, but is not guaranteed to discuss monetary policy.

Further ahead, AUD could be weakened by Wednesday’s construction output figure; this is forecast to show a -2.3% decline in Q3.

Key Events

21st November

09:05 AU Speech from Reserve Bank of Australia (RBA) Governor Philip Lowe

09:30 UK Public Sector Net Borrowing

11:00 UK Confederation of British Industry (CBI) Industrial Trends Orders

22nd November

00:30 AU Construction Output

UK Autumn Budget

23rd November

09:30 UK GDP Growth Rate

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

James Baxter

Senior Currency Broker
T: 01442 892 062

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