RBA Rate Decision Looms Large Over GBP/AUD Exchange Rate

The Pound-Australian Dollar exchange rate is facing potential pressure this week due to the Reserve Bank of Australia's (RBA) upcoming interest rate decision. The RBA may deliver another rate hike, which could boost the Australian Dollar and put downward pressure on the Pound.

Last week, GBP/AUD firmed after a surprise rise in domestic unemployment derailed the Aussie. At the time of writing, the exchange rate was trading at AU$1.8845, up around 0.2% from the start of last week's session.

The Pound got off to a soft start last week due to increased UK public sector borrowing concerns. The weaker fiscal picture added pressure on Sterling, particularly with UK borrowing costs remaining elevated. However, Sterling fared better after some moderately hawkish remarks from a Bank of England policymaker stoked expectations for a November rate hike.