Pound To Aussie Dollar Rate Projected Lower Ahead Of US Presidential Debate

Forex forecasts suggest the Australian dollar (AUD) exchange rates could tumble against the majors on 'a wave of rising volatility', according to leading foreign exchange analysts. We examine the latest GBP/AUD outlook in the near-term.

• The Pound to Australian Dollar exchange rate today: -0.4pct lower on the day at 1.69766 .
• The Australian Dollar to New Zealand Dollar exchange rate toda: -0.31% at 1.04946.

continued to trend weaker on Monday afternoon as investors bought into commodity-correlated currencies ahead of Monday’s US Presidential debates.

While demand for risk was lower ahead of the debates, the ‘Aussie’ and NZD were able to benefit from the US Dollar selloff, especially as the Pound appeared comparatively unappealing.

While risk appetite weakened generally on Monday, in anticipation of the first US presidential debate, this was not enough to shore up the GBP/AUDForeign Secretary Boris Johnson estimated that early 2017 would see Article 50 triggered, starting the UK on its official path to leaving the EU.

Latest Pound/Australian Dollar Exchange Rates

Pound Sterling Forecast: Friday’s GDP to Provide Clear Picture of Pre-Referendum Economy

The week to come will feature a fairly sparse scattering of UK domestic data, with the bulk of the high-impact results coming on Friday.

Monday will bring mortgage approvals figures for August, while Tuesday’s contribution will be the Confederation of British Industry (CBI) distributive trades result for September.

Friday will open with an optimistically-predicted GfK consumer confidence result, while later on in the morning, the Q2 GDP growth rate figures are due.

Upward revisions are expected, and as the finalised figures these will provide the definitive image of how the UK economy was faring before the Referendum vote impact was properly felt.

New RBA Governor saw Australian Dollar (AUD) Appreciate against Rivals

The previous week for Australia was a relatively quiet one, with the big news coming from the Reserve Bank of Australia (RBA), which saw Philip Lowe replace Glenn Stevens as Governor after 10 years.

While this change of management was predicted to cause some market unrest, Lowe’s first days actually saw the Australian Dollar rise in value.

The new Governor’s first real test came with a meeting with the Australian Parliament, where Lowe stressed that he would not be strictly sticking to inflation targets in the future, unlike his predecessor.

Australian Dollar Exchange Rates Forecast sees RBA and Home Sales Results due Next Week

The coming week is not expected to feature much high-impact Australian data; movement will start off on Tuesday morning when the ANZ Roy Morgan weekly consumer confidence index comes in.

Looking ahead to Wednesday, a speech from RBA official Malcolm Edey is due, while Thursday will see the August job vacancies announced.

On Friday, the HIA new home sales results for August are due out; the last recorded movement was a -9.7% slide on the month.

Aussie Economic Focus: RBA’s Lowe Blasted Banks during First Week

The appointment of a new central bank Governor is always a significant event, particularly when the successor decides not to follow suit with the former Governor.

Starting off his tenure with something of a bang, Lowe criticised the practices of Australia’s banks, stating;

‘There have been too many examples of poor outcomes, particularly in the wealth management and insurance industries...and that's disappointing to us all. What I would like to see is really banking return to be seen as a strong service profession. I don't know how far away from that we are. Banking has historically been a profession, a profession of stewardship, custodians, service, of advisory...it's not a marketing or product distribution business. Banking is a profession.’

ABN AMRO's Roy Teo, Senior FX Strategist, notes the Australian dollar exchange rate's recent performance:

"The AUD has outperformed the NZD in the past week as financial markets are coming to terms that the Reserve Bank of Australia (RBA) is likely to keep monetary policy unchanged this year, while another 25bp rate cut is still expected in New Zealand."

"Earlier this week, RBA governor Lowe said that the RBA is not an ‘inflation nutter’ and some degree of variability in inflation is inevitable and appropriate."

"This has raised the hurdle rate of policy easing in the coming months even if inflation in the third quarter remains below the RBA’s 2-3% target range."

"On the other hand, the Reserve Bank of New Zealand reiterated that further policy easing will be required to ensure that future inflation settles near the middle of their target range."

"As monetary policy divergence in Australia and New Zealand is not fully priced in by financial markets, it is likely that AUD/NZD will continue to grind higher towards 1.07 in the coming weeks."