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Chance of Pound Sterling Gains on Higher Inflation

Last week’s high: AU$1.8361

Last week’s low: AU$1.8115

GBP/AUD Recap: Volatility on Brexit Forecasts

The Pound ultimately rose against the Australian Dollar last week, but there was significant GBP/AUD volatility due to some statements about Brexit.

EU Chief Negotiator Michel Barnier triggered a GBP rally when he predicted concluding Brexit talks by November, while European Commission President Jean-Claude Juncker had the opposite effect when he rejected post-Brexit UK membership of the EU single market.

The Australian Dollar made a late-week rise when better-than-expected employment stats were published.

AUD Outlook: Higher UK Inflation to Cause GBP/AUD Exchange Rate Rise?

The Pound could rise sharply against the Australian Dollar this week, depending on the reaction to Wednesday’s UK inflation data.

Before then, however, the Australian Dollar could advance if the release of Tuesday’s Reserve Bank of Australia (RBA) minutes excites traders.

If these minutes along with Thursday’s RBA bulletin both reveal that RBA policymakers are planning a 2019 interest rate hike then the AUD/GBP exchange rate could rise.

If higher UK inflation is reported then the Pound could jump against the Australian Dollar – beyond this, support for Sterling might drop if later retail sales figures show a slowdown.

The week will end with a Bank of England (BoE) bulletin. Similarly to the RBA bulletin, this might boost the Pound if it hints at an interest rate hike in 2019.

 

Key Events

18th September

01:30 Reserve Bank of Australia (RBA) Meeting Minutes

19th September

09:30 UK Inflation Rate

20th September

02:30 Reserve Bank of Australia (RBA) Bulletin

09:30 UK Retail Sales

21st September

12:00 Bank of England (BoE) Quarterly Bulletin

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

Alastair Archbold

Currency Trader

T: 01442 892 066

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