UK Sterling and Australian Dollar Latest Forecast

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UK Sterling and Australian Dollar Latest Forecast

Guest Speaker: John Cameron “Pound Sterling To Euro And Australian Dollar Forecasts Hinge On Central Bank Decisions.”

With influential central bank interest rate decisions ahead we can expect significant Pound to Euro (GBP EUR) and Pound to Australian Dollar (GBP AUD) exchange rate movement.


With the Reserve Bank of Australia (RBA) and European Central Bank (ECB) set to deliver interest rate decisions later this week, the GBP EUR and GBP AUD currency pairs could experience significant volatility.

Pound to Euro exchange rate chart

Will the RBA Cut Interest Rates? AUD Exchange Rates Face Serious Headwinds

This week’s session brings several significant risk events for the AUSTRALIAN DOLLAR (currency : AUD). Movement is almost guaranteed for the Dollar from Down Under during the early hours of tomorrow morning (UK time), when the Reserve Bank of Australia (RBA) makes its latest monetary interest rate announcement. The RBA’s policy committee is widely expected to sit on its hands and leave its benchmark lending rate at its current record low level of 1.5%.

Current GBP EUR AUD Exchange Rates

On Monday the Euro to British Pound exchange rate (EUR/GBP) converts at 0.838

Today finds the pound to euro spot exchange rate priced at 1.194.

Today finds the pound to us dollar spot exchange rate priced at 1.271.

The pound conversion rate (against australian dollar) is quoted at 1.713 AUD/GBP.

Please note: the FX rates above, updated 5th Dec 2016, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.

Will the Pound Australian Dollar (GBP AUD) Currency Pair Surge?

However, the minutes of the last RBA get-together dropped heavy hints that further rate cuts would be needed in order to spur Australia’s flagging economy. Such an outcome tomorrow would therefore hit the Aussie unit hard, sending the Pound Sterling to Australian Dollar (GBP AUD) exchange rate sharply higher.

Aussie Dollar-holders will also be eyeballing Australian Q3 Gross Domestic Product (GDP) figures, due out early the next day, to provide the AUD with further near-term direction. The Q2 year-on-year result printed at 3.3% – an improvement on this result on Wednesday would see the Aussie strengthen once more, with a move back down into the mid-1.6000s a live possibility for the Pound Australian Dollar exchange rate in such a circumstance.

Euro to pound sterling exchange rate chart

What will the ECB Do with QE? 3 Options to Cause GBP EUR Volatility

Elsewhere, perhaps the main risk event of the week comes on Thursday lunchtime when the European Central Bank (ECB) makes its latest, and much-awaited, policy announcement. ECB President Mario Draghi informed investors earlier in the year that his Bank was reviewing its ongoing €80 bn Quantitative Easing (QE) programme and would be making an announcement on its future direction after the December policy meeting. The controversial asset purchase scheme is due to come to an end in March 2017, meaning that Draghi’s policy board is now left with three clear choices –

1.) To extend the policy at its current level – a move which will hurt the EURO (currency : EUR) forecast

2.) To abruptly end the policy – a move which help the outlook for the euro

Or – the most likely outcome –

3.) To taper the exiting policy – a euro-neutral outcome, depending on how gradual the taper is

Any of these decisions is liable to have a significant impact on the Pound Euro exchange rate before the weekend.

John Cameron
John Cameron

John Cameron is a senior dealer, contributing regularly to the podcast. He studied Economics at Cambridge University and has extensive experience in the Financial Services Sector, including working for Chartered Accountants PwC. Prior to joining TorFX, John was a Director of his own Commercial Mortgage Brokerage and is FCA Registered to give mortgage advice in the UK.

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