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Australian Dollar Higher after Sales Data, but GBP/AUD Rebounds

Yesterday’s high: AU$1.7322

Yesterday’s low: AU$1.7105

Late-Week Pound Rally Triggered by ‘Soft Brexit’ Hopes

The GBP/AUD exchange rate fell for most of last week, with the pairing dropping by a further ½ cent after Australia’s retail sales figures smashed forecasts.

However, GBP/AUD staged an impressive rebound on Friday, jumping by 1%.

The Pound’s gains against the Australian Dollar were encouraged by reports that Spanish and Dutch finance ministers were planning to support a ‘soft Brexit’.

Ex-UKIP leader Nigel Farage also suggested that a second Brexit referendum could be held.

AUD Outlook: GBP/AUD Volatility Ahead On UK Inflation Stats

The Pound could turn turbulent against the Australian Dollar on 16th January when high-impact UK inflation data is published.

December’s readings are tipped to show a slowdown in year-on-year inflation, which could lend the Pound support.

Lower inflation is usually bad news for interest rate hike-seeking traders, but the Bank of England (BoE) seems unlikely to raise interest rates in the near-term and a dip in consumer price pressures could improve UK consumer conditions and raise confidence.

Australian Dollar gains are possible if Wednesday’s Westpac consumer confidence reading shows improved sentiment and Thursday’s jobs data impresses.

Key Events

16th January

09:30 UK Inflation Rate

17th January

23:30 AU Westpac Consumer Confidence Index

18th January

00:30 AU Unemployment Rate

00:30 AU Employment Change

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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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