Optimistic Outlook from RBA Governor Pushes AUD/GBP Exchange Rate Higher
The Australian Dollar to Pound (AUD/GBP) exchange rate has risen to its best level since late January 2018 today, thanks to a recent Reserve Bank of Australia (RBA) event.
RBA Governor Philip Lowe has given a speech which has raised AUD trader confidence; Mr Lowe stressed that the next interest rate change would likely be a hike instead of a cut.
While Mr Lowe didn’t indicate precisely when interest rates could be increased, this assertion and his broadly positive outlook have enabled Australian Dollar gains today.
Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Drops as Brexit Pressures Grow
The Pound (GBP) has been in low demand today, making clear losses against the Australian Dollar (AUD) and most other currency peers.
The GBP/AUD exchange rate has fallen near the lowest level since January 2018; this devaluation has been caused by growing concerns about a ‘no-deal’ Brexit.
With no major UK economic data to refer to, GBP trader confidence has steadily fallen in the face of warnings about the damage a bad Brexit deal could cause.
The latest voice of caution has come from Scotland’s First Minister, Nicola Sturgeon. Speaking at an event in Edinburgh on Tuesday, Mrs Sturgeon asserted that:
‘With every day that passes, the prospect of a no deal Brexit or a Brexit with very, very little information about the future relationship seems to become more and more likely.
‘Both of those outcomes would be completely unacceptable, absolutely disastrous for our economy, so I hope [Prime Minister Theresa May] can reassure me that neither of those things are going to happen.
‘But if she can’t, then I hope she will outline her plan B, because we cannot simply take a step off that Brexit cliff-edge next March without knowing what comes next.’
Australian Dollar to Pound Exchange Rate Forecast: Is AUD/GBP Volatility ahead on RBA Policy Statement?
The Australian Dollar (AUD) to Pound (GBP) exchange rate could rise to fresh highs on Friday, when Reserve Bank of Australia (RBA) data comes out during the morning.
The RBA will be releasing a statement on monetary policy which could raise AUD trader confidence and trigger an Australian Dollar rise, depending on the outlook.
In the best case scenario, the RBA’s statement will echo the substance of Governor Philip Lowe’s recent remarks and point towards a potential 2019 interest rate hike.
Beyond the week’s last Australian economic data, the Australian Dollar to Pound exchange rate could decline when UK GDP data is released later on Friday.
The UK ecostats, consisting of initial GDP estimates for Q2 2018, are predicted to show an acceleration in the pace of economic growth on the quarter and the year.
Such results could cause a much-needed boost in GBP trader confidence and push the GBP/AUD exchange rate up before the weekend.