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GBP/AUD Forecast: Pound Australian Dollar Exchange Rate Heads Higher on RBA Interest Rate Decision

September 7, 2021 - Written by John Cameron

The Pound to Australian Dollar (GBP/AUD) exchange rate has strengthened this morning on the back of rising house prices in the UK.

The GBP/AUD pairing are currently trading at around AU$1.8637, as the Australian Dollar struggles following the latest Reserve Bank of Australia (RBA) interest rate decision.

Pound (GBP) Supported by Rising UK House Prices

The Pound has strengthened against the Australian Dollar this morning following the release of the latest Halifax house price index from the UK.

The Halifax house price index rose to a new record high in August as demand for housing pushed up the cost of house prices.

Russell Galley, managing director at Halifax, commented on the latest figures from the housing sector, saying:

‘Much of the impact from the stamp duty holiday has now left the market, as highlighted by the drop in industry transaction numbers compared to a year ago. However, while such Government schemes have provided vital stimulus, there have also been other significant drivers of house price inflation.’

‘The macroeconomic environment is becoming increasingly positive, with job vacancies at a record high and consumer confidence returning to pre-pandemic levels. Coupled with a supply of properties for sale that looks increasingly tight, and barring any reimposition of lockdown measures or a significant increase in unemployment as job support schemes are unwound later this year, these factors should continue to support prices in the near-term.’

Australian Dollar (AUD) Struggles on RBA Interest Rate Decision

The Australian Dollar (AUD) has been struggling this morning as the Reserve Bank of Australia chose to maintain its tapering plans.

More so the bank chose to hold interest rates at 0.1%, as experts believe that policy makers chose to take a more indecisive’ tone.

A statement from RBA Governor Philip Lowe read:

‘The recovery in the Australian economy has, however, been interrupted by the Delta outbreak and the associated restrictions on activity. GDP is expected to decline materially in the September quarter and the unemployment rate will move higher over coming months. While the outbreak is affecting most parts of the economy, the impact is uneven, with some areas facing very difficult conditions while others are continuing to grow strongly.’

‘This setback to the economic expansion is expected to be only temporary. The Delta outbreak is expected to delay, but not derail, the recovery. As vaccination rates increase further and restrictions are eased, the economy should bounce back. There is, however, uncertainty about the timing and pace of this bounce-back and it is likely to be slower than that earlier in the year.’

GBP/AUD Exchange Rate Outlook: Global Market Mood in Focus

In absence of any notable data for the Australian Dollar will instead see investors keep an eye on the global market mood, a further resurgence in the US Dollar could cause AUD to suffer.

More so, an absence of data from the UK could see Sterling begin to struggle throughout tomorrow’s session.

The GBP/AUD exchange rate will continue to be driven by any further global coronavirus developments, as cases continue to increase the exchange rate could stumble.

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