Last week’s high: AU$1.7976

Last week’s low: AU$1.7767

GBP/AUD Exchange Rate Boosted by August Interest Rate Hike Forecast

The Pound to Australian Dollar exchange rate was volatile last week, despite GBP being boosted by a shift in the Bank of England’s (BoE) outlook.

BoE policymaker Andy Haldane voted for higher interest rates at the monthly meeting, creating a split of 3-6 among the Monetary Policy Committee (MPC).

This meant no immediate change to the BoE interest rate, but economists soon forecast an August interest rate hike following the news.

Australian Dollar traders were cautious last week, with forecasters predicting no Reserve Bank of Australia (RBA) interest rate hike until 2020 at the earliest.

AUD Outlook: Risk of Losses on Disappointing UK First Quarter

This week’s main economic news releases will all relate to the UK, so the Pound might be dominant in the GBP/AUD exchange rate.

First up, BoE Governor Mark Carney will be discussing the bank’s financial stability report on Wednesday.

If Mr Carney and the report suggest that the UK economy could strengthen in the coming months, the GBP/AUD exchange rate is likely to rise.

Beyond this, the other major economic news will be Friday’s GfK consumer confidence reading and finalised Q1 GDP and business investment data.

The confidence measure for June is forecast to improve slightly, but otherwise the Pound could drop if slower GDP growth and business investment is confirmed.

Key Events

27^th June

09:30 Bank of England Governor Mark Carney Speech

29^th June

00:01 GfK UK Consumer Confidence

09:30 UK GDP (Q1)

09:30 UK Business Investment (Q1)

 

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James Baxter
Senior Currency Broker
T: 01442 892 062