Falling UK Borrowing Deficit could Boost GBP/AUD Exchange Rate
The Pound (GBP) has fallen by -0.3% against the Australian Dollar (AUD) today, dropping to an exchange rate of AU$1.7498.
This decline comes despite the news that UK retail sales activity rose in July; Sterling’s losses are instead down to a stronger Australian Dollar.
Looking beyond today’s UK ecostats, the next economic data that could affect the Pound will be government borrowing figures out on Tuesday next week.
These readings, covering borrowing for public sector spending in July, are forecast to show a reduction of June’s spending deficit.
A forecast-matching shift from £-4.53bn to £-2.1bn could boost Pound Sterling demand, as it would raise the chances of a future borrowing surplus.
As it stands, another deficit reading could mean continued spending cuts across the public sector, putting a strain on organisations like the NHS.
Future GBP/AUD Exchange Rate Forecast: Will Lower Consumer Confidence Drag Pound Sterling Down?
Beyond the UK borrowing data, the Pound to Australian Dollar (GBP/AUD) exchange rate could also be affected by consumer confidence stats out on 31st August.
This reading, coming from statistics company GfK, is expected to show a worsening of July’s figure with a shift from -10 points to -13.
Any negative reading means that pessimistic consumer respondents are in a majority.
A forecast-matching result would suggest that ongoing issues are weighing on UK consumer confidence – these may include Brexit and current GBP weakness.
Are Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Gains ahead on RBA Speeches?
Current Australian Dollar (AUD) gains could continue this week, when Reserve Bank of Australia (RBA) Governor Philip Lowe and policymaker Luci Ellis speak on Friday.
Mr Lowe will be speaking at the House of Representatives Standing Committee on Economics, while Ms Ellis will give remarks at an economics event in Canberra.
Both RBA officials could cause AUD/GBP exchange rate gains if they back tighter Australian monetary policy, which could include raising interest rates.
Such sentiments are not guaranteed, but given that the Australian unemployment rate has just fallen, the likelihood of a positive economic outlook has increased.
RBA Minutes and AU Construction Data could Push AUD/GBP Exchange Rate Higher
Next week’s Australian economic news could bring additional Australian Dollar to Pound (AUD/GBP) exchange rate gains; this will start with RBA minutes.
Out on Tuesday, the minutes will reveal the thoughts and opinions of RBA policymakers at their latest monetary policy meeting.
The minutes could raise demand for the Australian Dollar if, as with this Friday’s RBA speeches, they show an inclination towards raising Australian interest rates.
Beyond this, Wednesday’s Australian construction output figures could similarly support the AUD/GBP exchange rate if they reveal forecast-matching growth.