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The vast majority of retail client accounts lose money when trading CFDs.

You should consider whether you can afford to take the high risk of losing your money.

Important Notice - Fraud awareness
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The vast majority of retail client accounts lose money when trading CFDs.
Important Notice - Fraud awareness
Important Notice - Scam alert
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail client accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.
Important Notice - Fraud awareness
Important Notice - Scam alert
The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. The vast majority of retail investor accounts lose money when trading CFDs / Spread betting with this provider. You should consider whether you understand how CFDs / Spread betting work and whether you can afford to take the high risk of losing your money.
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GBPAUD Forecast as UK Welcomes New Prime Minister

The Reserve Bank of Australia will meet again on Tuesday to announce their latest monetary policy plans.

GBPAUD has rallied after the Reserve Bank of Australia hiked interest rates by 50 basis points as expected. The bank’s governor, Philip Lowe, did not provide much of a forecast in his accompanying speech, and the Australian dollar sold off.gbpaud chart

GBPAUD-Weekly Chart

As we see on the weekly charts, the Australian dollar was probing some new lows versus the British Pound, but Sterling is trading at 1.70 and will want to secure that level with a strong trendline.

Traders are a little unsure of the bank’s next path, but the RBA expects inflation to peak below 8% before the end of the year, with a drop to 3% by 2023. The Australian economy is in decent health with a strong labour market. However, property prices will be a focus point after a recent slide.

The market will now await an update on Australian GDP growth on Wednesday. Economists are expecting a 3.5% print for GDP in Q2, which would follow a 3.3% gain from Q1. These numbers are much stronger than what is presently observed in the UK and Europe, and the dollar has the upper hand.

The pound sterling is looking to secure a low with the announcement of a new Prime Minister in Liz Truss. The country’s new leader will have to tackle a list of problems from her first day in the job, which includes soaring inflation, slowing wages, and high energy bills.

The UK is already on the brink of a recession, which will make the job more difficult as any action taken to help families will increase the UK’s already bloated debt levels. Truss is expected to spend up to £90 billion on plans to cap soaring energy prices and provide help for households and businesses.

With these points in mind, it may be hard for the British currency to see a sustained rally, and we should watch how the pound reacts to headlines from the new government around the key 1.70 level. The pound failed to find buyers at the 1.775 and 1.750 levels, but the economic outlook has since deteriorated.

Last Updated: 07/09/2022

This market commentary and analysis has been prepared for ATFX by a third party for general information purposes only. Any view expressed does not constitute a personal recommendation or solicitation to buy or sell as it does not take into account your personal circumstances or objectives, and should therefore not be interpreted as financial, investment or other advice, or relied upon as such. You should therefore seek independent advice before making any investment decisions. This information has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. We aim to establish and maintain and operate effective organisational and administrative arrangements with a view to taking all reasonable steps to prevent conflicts of interest from constituting or giving rise to a material risk of damage to the interests of our clients. The market data is derived from independent sources believed to be reliable, however we make no representation or warranty of its accuracy or completeness, and accept no responsibility for any consequence of its use by recipients. Reproduction of this information, in whole or in part, is not permitted.


 

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