Last week Sterling managed some small gains against the Australian Dollar, which, given the prospect for GBP/AUD volatility this week, could be a short-term opportunity for those buying Australian Dollars with Pounds.
US Dollar issues helping AUD
The Australian economy has been performing well recently, this has been reflected in a series of positive economic data releases. With the US Dollar impacted by the recent hurricanes in the US and the potential for conflict with North Korea, the Australian Dollar has become more attractive to investors due to its strong performance and good interest rates.
Data releases that could affect GBP/AUD this week
Tomorrow morning we are expecting UK inflation data for August. If the expected 2.8% is not the result we could see some volatility on the GBP/AUD rate. Wednesday also has some important economic data, we will see the release of Westpac Consumer Confidence data at 01:30am (BST). This is followed later at 09:30am by UK unemployment figures and average earning figures. Recently inflation has been above average earnings for the UK which has a negative impact on the cost of living.
Thursday is lining up as a big day for the GBP/AUD exchange rate. First we have a speech from Guy Debelle, Deputy Governor of the Reserve Bank of Australia. This is followed shortly after by employment figures for August which could impact AUD. With the amount of positive Australian data being released it is widely expected that the AUD could strengthen following this.
UK interest rate decision
We then have the main event for Sterling, the Bank of England’s interest rate decision. There is no change in the base rate expected, the focus will most likely be on the way the Monetary Policy Committee (MPC) vote as any indication for a potential interest rate hike in the near future could cause a reaction from Sterling.
All in all I believe the struggles will continue for Sterling against the Australian Dollar this week.