Last week’s high: AU$1.8474
Last week’s low: AU$1.8183
Australian Dollar Gains versus Pound Despite Limited Risk-Sentiment
The Australian Dollar has easily been able to sustain gains against the Pound over the last week, but this has been more due to Pound weakness than Australian Dollar strength.
Disappointing UK inflation data and the perceived dovishness of Bank of England (BoE) Governor Mark Carney caused bets of a BoE interest rate hike in May to tumble. This is despite investors previously being confident that the bank would hike rates next month.
The sudden shift in the Pound outlook caused GBP/AUD to fall, despite the Australian Dollar’s own lack of support.
Australia’s latest job market results were underwhelming and risk-sentiment was generally lower at the end of the week, due to rising demand for 10-year US bond yields. This limited GBP/AUD losses.
AUD Outlook: Key Australian Inflation Results Ahead
Next week could be a major one for Australian Dollar trade, as Australia’s Q1 inflation rate results will be published on Tuesday.
Australian inflation is expected to remain close to its Q4 2017 results. Quarterly inflation is predicted to have slowed from 0.6% to 0.5%, with year-on-year inflation forecast to have risen slightly from 1.9% to 2%.
If inflation happens to come in well above expectations, Reserve Bank of Australia (RBA) interest rate hike bets could rise which would boost AUD demand.
Speaking of central bank speculation, the Pound’s movement is likely to be driven primarily by Bank of England (BoE) speculation and comments next week. Britain’s Q1 2018 growth projections on Friday could also influence GBP/AUD however.
02:30 Australian Inflation Rate
11:00 UK CBI Business Optimism
02:30 Australian Export and Import Prices
11:00 UK CBI Distributive Trades
UK GfK Consumer Confidence
09:30 UK Growth Rate
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