GBP/AUD Exchange Rate Stalls as Markets Shrug off UK Data
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is struggling to find momentum this morning as markets largely ignore the UK’s latest economic releases.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8591, almost unchanged from this morning’s opening rate but leaving the pairing close to a one-week low.
Pound (GBP) Struggles In Spite of Positive Data
The Pound (GBP) is stuck in a narrow range against the Australian Dollar and the majority of its other peers this morning as markets appeared unmoved by a run of positive data from the UK.
According to data published by the Office for National Statistics (ONS), UK GDP shot up in the first quarter of 2019, rising from 0.2% to 0.5%.
The GDP release was also accompanied by the UK’s latest investment figures, which showed a surprise jump in domestic business investment at the start of 2019, bringing an end to a year of contraction.
However while the headline figures where strong, analysts suggested they masked some underlying weakness in the UK economy as the bump in growth was almost completely fuelled by stockpiling ahead of Brexit, they claim.
Further dampening sentiment was the revelation that growth actually contracted in March after slowing in February, a worrying trend that investors fear could stretch into the second quarter.
Australian Dollar (AUD) Muted as US-China Trade Dispute Escalates
Meanwhile the Australian Dollar (AUD) is also showing limited movement this morning after the US moved forward with its plans to hike tariffs against China.
With last-minute talks in Washington failing to salvage a deal between the two powers ahead of Friday’s deadline, the White House more than doubled US tariffs against $200bn worth of Chinese goods, in what is a marked escalation in the trade spat.
The move has unsurprisingly unnerved markets this morning and prompted investors to steer clear of the risk-sensitive ‘Aussie’.
GBP/AUD Exchange Rate Forecast: Can a Lift in Wage Growth Help Sterling to Bounce Back?
Looking ahead to next week’s session, the Pound Australian Dollar (GBP/AUD) exchange rate may look to strengthen through the first half of the session thanks to the release of the UK’s latest employment report.
While another slide in unemployment will be welcomed by GBP investors, it’s likely to be the accompanying wage growth figures that are the main focus, with Sterling potentially jumping if the recent uptrend in earnings persisted into March.
Meanwhile, AUD investors are likely to be on the lookout for any further developments in the US-China trade dispute, with the risk-sensitive Australian Dollar likely to come under pressure if there are any further signs that the situation could escalate.
On top of this there will also be the publication of Australia’s own employment figures next week, which could weaken the ‘Aussie’ if a rise in unemployment in April stokes further fears regarding a potential rate cut from the Reserve Bank of Australia (RBA) this year.