GBP/AUD Exchange Rate Picks Up on Higher UK Average Earnings
UPDATE: The Pound Sterling Australian Dollar (GBP/AUD) exchange rate has risen to a two-week high today, with support coming from UK domestic data and Brexit news.
In the former case, a bigger-than-expected rise in the pace of UK wage growth has led to hopes for an early Bank of England (BoE) interest rate decision.
In the latter, EU Chief Negotiator Michel Barnier has once again boosted Sterling demand by predicting that Brexit talks could be concluded by November.
GBP/AUD Exchange Rate Rises Sharply as EU’s Barnier Predicts Imminent Conclusion to Brexit Talks
UPDATE: The Pound Sterling Australian Dollar (GBP/AUD) exchange rate has risen by 0.5% this afternoon, hitting an interbank exchange rate of AU$1.82.
This sudden rise in value has been caused by Bloomberg reporting that EU Chief Negotiator Michel Barnier believes a rapid resolution to Brexit talks is possible.
Mr Barnier has reportedly said that the Irish border issue (among others) needs to be resolved in ‘six to eight weeks’, which has raised hopes for concluding talks in that time.
Australian Dollar to Pound (AUD/GBP) Exchange Rate Steady after Household Debt Warning
The Australian Dollar (AUD) has held close to opening levels against Pound Sterling (GBP) today, failing to rise in the pairing due to trader caution.
The latest Australian economic news has featured a speech from Reserve Bank of Australia (RBA) Assistant Governor Michele Bullock.
Ms Bullock has warned that high household debt could prove problematic in the future, saying:
‘This raises potential vulnerabilities in both bank and household balance sheets.
‘While the risks are high, there are a number of factors that suggest widespread financial stress among households is not imminent.
‘It is nevertheless an area that we continue to monitor closely.’
Higher household debt reduces the chances of an imminent RBA interest rate hike, as while such an action would benefit savers, it would also increase debt repayment costs.
Balanced UK Output Stats Prevent GBP/AUD Exchange Rate Rise
The Pound (GBP) is trading in a narrow range against the Australian Dollar (AUD) today, hitting an interbank exchange rate of AU$1.81.
This is near last week’s closing exchange rate with the lack of movement being caused by a muted reception to today’s UK economic data.
On the plus side, the latest UK construction output figures for July have risen by 3.5% for the annual reading, up from 2.2% in July 2017.
Additionally, GDP growth during the month has accelerated from 0.1% to 0.3%, above the predicted 0.2% printing.
Less supportive UK data has included manufacturing and industrial production readings for July, which have both shown a slower pace of activity on the month and the year.
GBP/AUD Forecast: Will Pound Sterling Rise on UK Wage Growth Data?
This week, Pound/Australian Dollar exchange rate movement is likely to be led by Tuesday’s UK jobs market stats and Thursday’s Bank of England (BoE) interest rate decision.
The initial jobs data could cause GBP/AUD exchange rate volatility; on the negative side, a higher unemployment rate is predicted alongside more jobless claimants.
More positively, the Pound could rise in value if the pace of wage growth in July is reported higher for both readings.
The week’s main UK news, the BoE interest rate decision, isn’t expected to bring any adjustment, but the Pound could still rise when the minutes of the meeting come out.
If they reveal that BoE policymakers are optimistic about future UK economic growth then the Pound to Australian Dollar exchange rate could rise sharply ahead of the weekend.
For Australian Dollar traders, this week will bring confidence stats on Tuesday and Wednesday, followed by Thursday’s unemployment figures.
Both Tuesday’s business confidence reading and Wednesday’s consumer confidence measurements could devalue the Australian Dollar if they decline, as forecast.
Beyond this, the AUD/GBP exchange rate could also worsen if Thursday’s unemployment rate reading increases from 5.3% to 5.4%, as is currently expected by analysts.