This week could be a stormy one for the Pound Australian Dollar exchange rate, with the UK set to release potentially influential inflation and employment figures.
Last week saw the Pound start and finish trading in the region of 1.62 against the ‘Aussie’, with GBP unable to hold the 1.64 level seen towards the end of the week.
Pound Sterling Update: Article 50 Bill Still in Focus
In the wake of the House of Commons approving the Article 50 bill by a majority last week, the bill has been forwarded to the House of Lords.
Parliament is currently on recess until February 20th, but when proceedings resume peers are expected to follow a similar pattern of debate and discussion over possible amendments before another vote.
While the Commons failed to bring any changes to the bill, the Lords may buck the trend and impose some adjustments. If they choose to do so, we could see some GBP volatility.
Australian Dollar Dampened after Trump Promises ‘Phenomenal’ Tax Plans
The Australian Dollar is on a bit of a downtrend thanks to US Dollar strength and reduced demand for higher-risk assets.
This follows a statement last week from US President Donald Trump, who promised that in the coming weeks he would reveal ‘phenomenal’ tax reforms for the US.
Although entirely lacking in detail, the statement nonetheless boosted markets and AUD posted losses even in the face of rising iron ore prices.
GBP AUD Exchange Rate Forecast
This week, Pound/Australian Dollar exchange rate movement may occur as a result of UK ecostats, including Tuesday’s inflation figures and Wednesday’s jobless claims, unemployment and earnings reports.
The most notable Australian news on the calendar is Tuesday’s confidence figures and Thursday’s national jobs data.
For the UK results, inflation is expected to rise annually in January but fall on the month, while average earnings are not expected to change and unemployment is due to stagnate at 4.8%.
If these forecasts prove wrong and inflation jumps while average earnings slow, the Pound could well slump against the Australian Dollar given that it would raise further concerns about the impact of rising inflationary pressures on consumer spending.
Australian data is less likely to impact the GBP AUD exchange rate unless it deviates markedly from forecasts.