Pound Australian Dollar Exchange Rate Flat as UK GDP in Focus
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning, as markets react to the UK’s latest GDP figures.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8083, virtually unchanged from this morning’s opening rate.
Pound (GBP) Steady as UK GDP Revised Higher
The Pound (GBP) is holding its ground against the Australian Dollar and the majority of its other peers this morning, as GBP investors welcome the UK’s latest GDP figures.
According to data published by the Office for National Statistics (ONS), the UK economy expanded by 1.3% in the last quarter of 2020, being revised up from previous estimates of 1%.
The release confirms that the UK will have avoided a double-dip recession this winter, much to the relief of GBP investors.
However, the finalised figures also saw the contraction of growth in the second quarter revised as well, with the ONS suggesting that the UK economy slumped by a record 19.5%, against previous estimates of a 19% decline.
Jonathan Athow, deputy national statistician for Economic Statistics at the ONS, said:
‘Our revised quarterly figures show the economy shrank a little more than previously estimated in the initial stages of the pandemic, before recovering slightly more strongly in the second half of last year.
‘These new estimates paint the same overall picture as before, with historically large falls in GDP in the spring, followed by a recovery in the summer and autumn.’
All in all, this saw the UK economy contract 9.8% in 2020, slightly better than the 9.9% slump initially forecast but still the largest slump on record.
Australian Dollar (AUD) Buoyed by USD Pullback
Meanwhile, the Australian Dollar (AUD) has found some support this morning, courtesy of a pullback in the US Dollar (USD).
A modest correction in the US Dollar following a drop in US Treasury yields overnight, has offered some breathing room for the ‘Aussie’ and other risk sensitive currencies.
This has also allowed the Australian Dollar to build on the modest gains made overnight in the wake of China’s latest PMI figures, which printed above expectations in March and reflected well on the China-proxy ‘Aussie’.
Pound Australian Dollar Exchange Rate Forecast: Robust Trade Figures to Boost AUD?
Looking ahead to the latter half of the week, the Pound Australian Dollar exchange rate may trend lower following the publication of some Australian data.
This comes as economists forecast that Australia’s latest trade balance will report a surplus of AU$9.7bn in February, a modest fall from a record AU$10.1 expansion reported in January.
However potentially tempering any upside in the ‘Aussie’ will be the accompanying retail sales figures which are expected to confirm a sizable contraction in domestic sales growth last month.
Meanwhile the focus for GBP investors is likely to be on UK coronavirus statistics as they remain wary that Europe’s recent resurgence in cases could spill across the Channel and force the UK government to alter its reopening roadmap.