GBP/AUD Exchange Rate Steady Following UK Borrowing Figures
The Pound Australian Dollar (GBP/AUD) exchange rate is holding steady this morning as some upbeat UK government borrowing figures help to trim losses in Sterling.
At the time of writing the GBP/AUD exchange rate is holding close to today’s opening levels, having rebounded from a slight dip earlier this morning.
Pound (GBP) Exchange Rates Buoyed by UK Borrowing Figures
The Pound (GBP) is easing away from its worst levels against the Australian Dollar (AUD) this morning as markets welcome the release of the UK’s latest public borrowing figures.
According to data published by the Office for National Statistics (ONS), government borrowing fell from £4.76bn to £3.26bn in September, beating expectations it would remain relatively unchanged at £4.6bn.
Borrowing for the year to date in now at £19.6bn, roughly £10bn lower than at the same point last year.
UK Public Finances: Borrowing (PSNB ex) in current financial year-to-date was £19.9 billion: £10.7 billion less than in the same period in 2017; lowest year-to-date for 16 years (2002) https://t.co/kVrna5WkTs pic.twitter.com/T2xaBju1u9
— Fraser Munro (@FraserMunroPSF) October 19, 2018
This has bolstered hopes that Chancellor Philip Hammond will have more room for spending when he unveils his Autumn budget later this month.
Australian Dollar (AUD) Muted as Chinese GDP Slows
At the same time the Australian Dollar (AUD) is struggling this morning in the wake of some weaker-than-expected growth figures from China.
According to China’s National Bureau of Statistics (NBS), Chinese GDP slowed from 6.7% to 6.5% in the third quarter, coming in below forecasts of 6.6% growth and resulting in the Chinese economy expanding at its slowest pace since the financial crisis.
China is a major trading partner for Australia, with a third of all Australian exports destined for Chinese ports, meaning its economic performance can have major knock on effects for Australia and consequently the Australian Dollar.
GBP/AUD Exchange Rate Forecast: More Brexit Driven Volatility Ahead?
Looking ahead to next week’s session, in the absence of any notable economic data, Brexit is likely to remain the main catalyst for movement in the Pound Australian Dollar (GBP/AUD) exchange rate.
With talks currently at a deadlock this may result in increased volatility in Sterling throughout the session especially if Theresa May continues to face political pressure from within her own party regarding her Brexit proposals.
Meanwhile with no data to steer it next week, the Australian Dollar is likely to find itself increasingly vulnerable to external influences, with the potential for further geopolitical uncertainty likely to drag on the risk-sensitive ‘Aussie’.