GBP/AUD Exchange Rate under Pressure after RBA Raises Growth Forecasts
Last week’s high: AU$1.8114
Last week’s low: AU$1.7954
Australian Dollar (AUD) Exchange Rates Shake Off Weak Construction Sector Data
The continued contraction of the Australian construction sector failed to weigh the Australian Dollar down for long last week.
As the Reserve Bank of Australia (RBA) revised its growth forecasts a little higher this prompted investors to pile into the ‘Aussie’.
AUD exchange rates benefitted as jitters mounted ahead of the US midterm elections, finding further encouragement when the results delivered a political deadlock.
Solid Chinese trade data also offered encouragement to the Australian Dollar, in spite of key iron ore imports falling.
With markets in a generally risk-on mood the GBP/AUD exchange rate came under pressure.
Although there was speculation of imminent progress on a Brexit deal this was not enough to buoy the Pound for long.
As UK growth was found to have stagnated in both August and September the mood towards the Pound soured, leaving GBP exchange rates on a weaker footing ahead of the weekend.
AUD Outlook: Underwhelming Employment Data May Dent Australian Dollar
The Australian Dollar could return to a downtrend this week if Thursday’s labour market data fails to impress.
A fresh uptick in the unemployment rate could see AUD exchange rates trending sharply lower as confidence in the domestic outlook falters.
However, if November’s consumer inflation expectations survey points towards rising price pressures this could offer the Australian Dollar a boost.
As long as the week’s data offers the RBA cause for continued confidence AUD exchange rates are likely to remain on a stronger footing.
Additional pressure could be in store for the GBP/AUD exchange rate if the latest UK weekly earnings and inflation data prove discouraging.
Evidence of weakening wage growth may weigh heavily on demand for the Pound, especially if Brexit-based anxiety continues to mount.
Key Events
13th November
00:30 Australia NAB Business Confidence Index
09:30 UK Average Weekly Earnings
23:30 Australia Westpac Consumer Confidence Index
14th November
09:30 UK Consumer Price Index
15th November
00:30 Australia Unemployment Rate
01:00 Australia Consumer Inflation Expectations
09:30 UK Retail Sales
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Alastair Archbold
Currency Dealer