The Pound has held its ground against the Australian Dollar (AUD) on Tuesday’s trading session, thanks to AUD-limiting news coming out of Australia. This has enabled a slight GBP AUD appreciation, from a starting rate of 1.7005 to 1.7032.
The Australian Dollar has largely been held back by a World Economic Forum report, which has looked at international competitiveness. Although Australia ranked 21st on the index, the report painted a gloomy picture about Australia’s chances for future movement up the scale.
Among the issues were high national taxes, excessive regulation and a persistent lack of upwards wage growth movement.
(First published September 26th, 2017)
The Pound has advanced by 0.4% against the Australian Dollar recently, but could face turbulence if the UK’s personal debt levels continue to rise.
If Australia commits to a successful space program in the years ahead, it could see an economic boom.
UK’s Growing Debt Problems could Trigger Pound Crash in the Future
As well as Brexit remaining a strong source of influence on the Pound in the future, the UK currency could also be affected by the state of household debt across the country.
A recent report from the Bank of England (BoE) Financial Policy Committee (FPC) has focused on this issue, with an alarming forecast.
FPC experts has stated that there is a ‘risk in the rapid growth of consumer credit’, elaborating that;
‘It is a risk to banks’ ability to withstand severe economic downturns, because this asset class is disproportionately more likely to default.
Although the overall credit quality of consumer credit has improved significantly since the financial crisis, the FPC judges that lenders overall are placing too much weight on the recent performance of consumer lending in benign conditions as an indicator of underlying credit quality.
As a result, they have been underestimating the losses they could incur in a downturn’.
While this is not an explicit warning that the UK could face the ‘crisis conditions’ of the late 2000’s, it nonetheless remains a background issue for traders to consider.
If it looks like UK is continuing to build an unsustainable ‘debt mountain’ then the Pound could weaken, given that it could raise concerns about another financial crash becoming a reality.
Australian Dollar Outlook: Space Program could Bolster AU Economy
Taking a long-term look at Australia’s economic future, the country could be in for an economic boost if plans for a proper space agency get underway.
Although Australia has fielded satellite launches and a handful of astronauts, it still lags behind other countries with more developed programs.
Notably, it is the only country in the OECD, along with Iceland, which lacks a national space agency.
It is estimated that properly developing its space program could net Australia part of the estimated $420bn worth of the global space industry, in addition to providing new jobs and development opportunities.
Recent Interbank GBP AUD Exchange Rates
At the time of writing, the Pound to Australian Dollar (GBP AUD) exchange rate was trading at 1.7005 and the Australian Dollar to Pound (AUD GBP) exchange rate was trading at 0.5879.
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