Pound Sterling to Australian Dollar (GBP/AUD) Exchange Rate Slides on Hunt’s No-Deal Brexit Warning

Stark Warning from Foreign Secretary Pushes GBP/AUD Exchange Rate Lower

The Pound (GBP) has fallen against the Australian Dollar (AUD) today, falling to an interbank exchange rate of AU$1.74 and close to its worst levels of the week.

The latest news to weaken Pound Sterling has been a warning about a no-deal Brexit.

Echoing warnings made over previous weeks, Foreign Secretary Jeremy Hunt has cautioned that a bad Brexit deal would ‘be a mistake we would regret for generations’.

There are still no signs that Brexit talks will be resolved by the October deadline, so this assessment has been particularly troubling for GBP traders.

Australian Dollar to Pound (AUD/GBP) Exchange Rate Rises on RBA Governor’s Optimism

The Australian Dollar (AUD) has risen against the Pound (GBP) and most other peers today, following a speech from Reserve Bank of Australia (RBA) Governor Philip Lowe.

Mr Lowe has given a positive assessment of the Australian economy, saying:

‘In the short term … we are expecting the headline rate of inflation to dip a little in the September quarter.

‘[This] will help with cost-of-living pressures and free up income to spend on other things.’

Although Mr Lowe was concerned about the effects of US trade tariffs on Australia’s future development, the positive domestic assessment has still raised AUD demand.

Pound Sterling to Australian Dollar Exchange Rate Forecast: Are GBP/AUD Gains ahead on UK Borrowing Data?

The Pound (GBP) could recover lost ground and rise against the Australian Dollar (AUD) next week, potentially on UK government borrowing data.

Tuesday will bring July’s public sector net borrowing figure, which is forecast to show a reduction in the existing borrowing deficit.

While an as-expected shift from £-4.53bn to £-2.1bn would still leave the UK with a borrowing deficit, it would be a notable move closer to the surplus range.

Next week’s other notable UK news might not be so supportive – Thursday’s Confederation of British Industry (CBI) distributive trades reading.

August’s figure, which measures changes to sales activity across the UK, is tipped to slow from 20 points to 15.

Australian Dollar to Pound (AUD/GBP) Exchange Rate Gains Forecast on Optimistic RBA Outlook

Next week’s Australian economic data will continue to focus on the Reserve Bank of Australia (RBA), with minutes from the bank’s August meeting coming out on Tuesday.

If these minutes reinforce the notion that the RBA could raise interest rates in 2019, the Australian Dollar could rise against the Pound.

Beyond this, the only other notable data will be Wednesday’s construction output reading for Q2 2018; this could boost the AUD/GBP exchange rate if it shows growth from 0.2% to 1% as forecast.

Luke Trevail

Luke studied Journalism at university but quickly moved into the financial sector, initially working in retail banking before joining TorFX in 2007. As a Senior Account Manager Luke assists in overseeing the management of the company’s exposure to currency volatility. He uses his years of foreign exchange experience to produce regular news updates exploring the latest currency movements.

Contact Luke Trevail