This year has seen lots of bumps in the roads for both the AUD and GBP. But there have also been highlights and many gains made. The outlook for 2020 has been forecasted for the AUD and many are not holding their breaths for anything spectacular. The consensus is that the economy is still under repair but looks to better itself in 2020 than the current year. Meanwhile, for the GBP, positive GDP data helped the UK recoup some of its losses as the figures were revised. The next governor of the Bank of England was also revealed which gave the GBP a boost as the elected figure is deemed to be a “safe pair of hands”.
Outlook for AUD Looks Uninspiring, but the Central Bank Remains Optimistic
Forecasts for the upcoming year have begun to be predicted for the AUD. After a rocky year and a few interest rate cuts from the RBA, the AUD’s outlook looks bleak. Many economists are suggesting that the Aussie economy is under repair and needs some TLC before it can get back into winning ways. This TLC is likely to arrive from the RBA and fiscal policies. Despite this, some including the RBA themselves are remaining positive that the economy will pick up in 2020. The RBA have suggested that economic growth is expected to be around 2.75% in 2020 with a rise to around 3% in 2021. This is positive news for investors should this be the case, as the scenario appears to be that 2020 will build upon 2019 but will not be anything outstanding.
GBP Rallies on Positive GDP Data Revisions
For the GBP, it starts the week on a high after recouping losses following upbeat figures as growth was revised up from 0.3% to 0.4% in Q3. A rise in growth figures paves the way for further growth going into 2020 and this helped give the GBP a boost. Added to this, the new governor of the Bank of England was announced, Andrew Bailey will be the next governor and with this news support was given to the GBP as he was regarded ‘a safe pair of hands’. The latter end of last week also saw Boris Johnsons EU withdrawal bill easily pass through parliament but investors still remain cautious of a no-deal Brexit so this did little to stir up the Pound.
The UK market is set to close on Christmas and Boxing day and a lack of notable data will mean that the week ahead will likely be uneventful, limiting volatility.
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