The Pound to Australian Dollar exchange rate was boosted last week in line with how the Pound performed across the board last week. I noticed that the ranges traded between the pair was one of the highest as the pair struggled to gain a sense a direction, with the pair trading as low as 1.59 and as high as 1.65 during Thursdays trading session.
The highest the Pound managed to trade at last week was 1.66 which came as a surprise, but then so did Donald Trump’s victory and the exchange rates subsequent movements so last week was unpredictable as whole.
There are a number of issues which could determine the Pounds future price movements when compared with the Australian Dollar. The Pound has given a slight boost before Trumps election after the High Court ruled in favour of Parliament voting on when to invoke Article 50. This ruling is under pressure as the government immediately appealed it and I think the Pound will be boosted further if the appeal is unsuccessful, and vice versa.
The Reserve Bank of Australia has suggested that they won’t be cutting interest rates in the short term future, but should they choose to unpredictably we can expect to see the Australian Dollar weaken.
The Pound is also likely to come under pressure if talks of another record breaking interest rate cut down to 0.1% materialises.
Key events to look out for this week include tonight’s RBA Minutes, where the bank will offer an insight into their thinking behind recent monetary decisions. There is inflation data out of the UK tomorrow and unemployment data out on Wednesday so we could be in for a busy week for the GBP/AUD pair. Do feel free to get in touch if you wish to discuss the events further.