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GBP/AUD Exchange Rate Sees Dramatic Swings Following RBNZ Rate Cut

Last week’s high: AU$1.8170

Last week’s low: AU$1.7768

RBNZ’s Aggressive Rate Cut Prompts Wild Swings in the Australian Dollar

The Pound to Australian Dollar exchange rate traded in a wide range last week as the Reserve Bank of New Zealand’s (RBNZ) larger-than-expected rate cut shocked markets.

The ‘Aussie’ dropped sharply mid-week amid speculation that this would put pressure on the Reserve Bank of Australia (RBA) to keep cutting rates as well.

The surge in GBP/AUD was short-lived, however, with the pairing closing the session on the back foot. This came as a result of heightened Brexit uncertainty and a worrying contraction in UK GDP in the second quarter.

AUD Outlook: Sterling to Sink as UK Wage Growth Slows?

Looking to the week ahead, we expect UK political headlines to exert pressure on the GBP/AUD exchange rate.

The UK’s latest employment report is likely to influence Sterling sentiment this week, with an expected fall in wage growth for June likely to dent the Pound further.

AUD investors will also be focused on domestic employment figures next week.

This could see the ‘Aussie’ struggle in the latter half of the session with a suspected fall in full-time employment last month increasing the odds of another rate cut from the RBA this year.

 

Key Events

13th August

02:30 AU Business Confidence (Jul)

09:30 UK Unemployment Rate (Jun)

09:30 UK Wage Growth (Jun)

14th August

01:30 AU Consumer Confidence (Aug)

02:30 AU Wage Growth (Q2)

09:30 UK Inflation Rate (Jul)

15th August

02:30 AU Unemployment Rate (Jul)

02:30 AU Employment Change (Jul)

09:30 UK Retail Sales (Jul)

 

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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 892 062

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