GBP/AUD Exchange Rate Steady despite Lower UK Consumer Confidence
UPDATE: The Pound Sterling Australian Dollar (GBP/AUD) exchange rate is holding close to opening levels today, trading at a level of AU$1.77 on the interbank exchange rate.
This is a slight improvement on earlier trading, when the GBP/AUD exchange rate dropped to AU$1.76.
Today’s UK data has proven disappointing, consisting of a GfK consumer confidence reading which fell from -9 points to -10.
On the other side, Australian Dollar movement has been limited because new home sales in June have only risen by 2.2% instead of 4.5% as forecast.
Prediction for Higher UK Interest Rates Pushes GBP/AUD Exchange Rate Up
The Pound (GBP) has steadily risen against the Australian Dollar (AUD) today, hitting a level of AU$1.77 on the interbank rate.
This small advance comes ahead of Thursday’s Bank of England (BoE) interest rate decision, which could cause a Pound Sterling rally if it brings higher rates.
Making the case for a long-awaited rate hike taking place, Standard Chartered economists say:
‘The market [is] currently pricing in about a 90% chance of a rate hike in August.
‘Economic data released since the June policy meeting has reinforced this view, particularly the bounce back in GDP growth and improving business survey data.
‘Brexit adds a layer of uncertainty, but for now BoE policymakers are likely to look through the noise.’
Australian Dollar to Pound (AUD/GBP) Exchange Rate Drops on Investment Concerns
The Australian Dollar (AUD) has fallen back against the Pound (GBP) and other peers today following warnings about Australian underinvestment.
On a quiet data day, the Australian Dollar has been weakened by remarks from Chair of the Innovations and Science Australia Board Bill Ferris.
Looking at the state of Australian investment into research and development, Mr Ferris said:
‘[We] should be … rethinking the form, and not just the amount, that government support for business R&D takes in Australia compared with the leading innovation nations.’
Australia currently only spends around 1% of its GDP on development of this kind, compared to Japan’s 2.6% and the US’s 2%.
Amid wider concerns about slowing Australian economic growth, the latest news has lowered confidence among AUD traders.
GBP/AUD Forecast: Are Pound to Australian Dollar Exchange Rate Losses ahead on UK Confidence Data?
This week, Pound Sterling/Australian Dollar exchange rate movement may be caused by UK consumer confidence stats, PMI readings and the Bank of England’s (BoE) looming interest rate decision.
The first of these data releases, Tuesday’s GfK consumer confidence reading, might lower the GBP/AUD exchange rate if it reprints at -9 points as forecast.
The UK PMI readings, covering the manufacturing, construction and services sectors, are respectively out on Wednesday, Thursday and Friday.
These are expected to show lower activity across the board in July, which could add to any existing Pound to Australian Dollar exchange rate losses.
The situation could improve dramatically for Pound traders on Thursday, on what could be a historic BoE interest rate decision.
If policymakers go through with a rate hike then the Pound is likely to rally against the Australian Dollar.
This week’s main Australian data will include building permit stats on Tuesday, trade balance figures on Thursday and Friday’s retail sales reading.
Current estimates are for a rise in building permits and a larger trading surplus, but there could be late-week AUD losses if retail sales slow down, as forecast.