Last week’s high: AU$1.7586
Last week’s low: AU$1.7286
Australian Dollar Sold as Investors Seek Safer Currencies
The Australian Dollar’s bullish run against the Pound, which lasted throughout most of June, ended last week as the Pound to Australian Dollar exchange rate rebounded slightly from its worst levels in over six months.
For most of last week, GBP/AUD tumbled as fears of a potential ‘no deal’ Brexit weighed heavily on Sterling. Concerns that the UK may leave the EU without any Brexit deal at all dominated headlines and left the Pound broadly weak, and even the latest UK data failed to give the British currency much support.
However, while Sterling remained unappealing and GBP/AUD ultimately closed the week lower, the Australian Dollar was sold on Thursday and Friday due to the latest trade uncertainties.
US-China trade clashes escalated again last week and as Australia’s economy heavily relies on trade with both China and the US, this undermined USD.
Central Bank news weighed on the Australian Dollar too. The Reserve Bank of Australia’s (RBA) latest statement on monetary policy saw the nation’s inflation forecast downgraded, making investors even more doubtful that the bank could hike Australian interest rates any time soon.
AUD Outlook: Australian Wage and Job Data Could Boost AUD
The Australian Dollar’s weak-streak may not last if investors calm on last week’s risk-off movement. Markets were already fairly bearish on the Reserve Bank of Australia (RBA) too, so last week’s news may not lead to a prolonged Australian Dollar downtrend.
Instead, the Australian Dollar may find support in upcoming Australian ecostats, which could cause the Pound to Australian Dollar exchange rate to fall to near its worst levels again. Australian business confidence data will come on in Monday, followed by consumer confidence on Tuesday.
The biggest Australian ecostats of the week will be Wednesday’s wage growth figures and Thursday’s job market stats. If they impress investors AUD exchange rates may firm.
Sterling demand is likely to be driven by potential Brexit developments, especially comments regarding the possibility of a ‘no deal’ Brexit.
Many key UK ecostats will be published throughout the week too, including UK job stats, inflation figures and retail sales, but even if these impress the Pound’s potential for gains is limited so long as those ‘no deal’ Brexit fears persist.
02:30 Australian NAB Business Confidence
09:30 UK Job Market Report
01:30 Australian Westpac Consumer Confidence
02:30 Australian Wage Price Index
09:30 UK Inflation Rate
02:00 Australian Consumer Inflation Expectations
02:30 Australian Job Market Report
09:30 UK Retail Sales
12:30 RBA Governor Lowe Speech
If you need to make an AUD transfer but don’t have an account with us just click here to get started.