Pound Australian Dollar (GBP/AUD) Exchange Rate Retreats from Daily Highs as Market Mood Improves

Pound Australian Dollar (GBP/AUD) Exchange Rate Gives Ground as Risk Appetite Increases

(Updated 16:50, 27/9/21) The Pound Australian Dollar (GBP/AUD) exchange rate has fallen this afternoon, retreating from today’s high of AU$1.88812 but remaining up from this morning’s opening levels.

The shift comes as the global market mood grows more upbeat, boosting demand for the risk-sensitive ‘Aussie’.

One factor for this is that the Evergrande debt crisis has moved out of the spotlight. After the Chinese property giant missed an interest payment deadline last week things have been relatively quiet, and it seems as though investors are now focusing elsewhere.

Another factor may be the US durable goods orders report, which printed above expectations. New orders rose by 1.8% in August, more than double the forecast 0.7% rise. In addition, July’s figure – which previously showed a modest contraction – was revised to show a 0.5% increase.

This positive US data has raised investor confidence by showing signs of a strong recovery in the world’s largest economy, and the upbeat market mood seems to be boosting the ‘Aussie’.

Original article continues below:

Pound Australian Dollar (GBP/AUD) Exchange Rate Rallies after Falling Overnight

The Pound Australian Dollar (GBP/AUD) exchange rate jumped this morning, reversing its overnight losses, as the UK government attempts to tackle the country’s fuel outages.

The pair is currently trading at around AU$1.8863, up 0.5% from an overnight low of AU$1.8755, with Sterling’s upside seemingly driven by lingering tailwinds from last week’s Bank of England (BoE) decision.

Pound (GBP) Climbs despite Fuel Shortage Fears

The Pound (GBP) surged against the Australian Dollar (AUD) this morning, after slipping overnight, despite some headwinds for Sterling.

The upside in the Pound comes as the UK government has implemented the Downstream Oil Protocol in an attempt to resolve fuel outages across the country.

The lack of diesel and petrol has been primarily caused by a shortage of HGV drivers, meaning fewer deliveries, rather than a national shortage of fuel. However, as forecourts began running out of fuel on Friday, many began panic buying.

In response, the government has suspended the Competition Act 1998, allowing companies to share information and work together without fear of breaching competition law.

Kwasi Kwarteng, the business secretary, said:

‘While there has always been and continues to be plenty of fuel at refineries and terminals, we are aware that there have been some issues with supply chains. This is why we will enact the Downstream Oil Protocol to ensure industry can share vital information and work together more effectively to ensure disruption is minimised.’

Despite this, Sterling has strengthened against many of its counterparts today.

One factor supporting the Pound is the expectations of an earlier rate hike following the BoE’s policy decision last Thursday.

With the bank seemingly close to tightening monetary policy, and amid warnings of inflation persisting above 4% into 2022, some analysts brought forward their predictions for an interest rate rise to as early as March next year.

Australian Dollar (AUD) Loses Overnight Gains

Meanwhile, the Australian Dollar (AUD) has lost ground this morning, despite making gains in overnight trade.

The initial upside came as Australia inches closer to easing the lockdown restrictions affecting some of its states.

New South Wales, Victoria, the Australian Capital Territory and the Northern Territory are either easing restrictions or have eased restrictions recently, as Australia’s targeted vaccination rollout has been fairly successful.

The prospect of the country’s economy opening up again boosted AUD overnight, but it has been unable to hold its gains this morning.

It seems that a slight pullback in risk sentiment may have weighed on the risk-sensitive ‘Aussie’.

GBP/AUD Exchange Rate Forecast: GBP Investors Eyeing BoE Speech

GBP investors may be looking to a speech by BoE Governor Andrew Bailey this afternoon for fresh impetus.

After last week’s BoE decision, traders may be hoping for more hawkish comments from Bailey. However, if the Governor raises concerns about the UK’s economic recovery then his speech could dampen GBP demand.

Meanwhile, the UK has experienced a tumultuous week of supply-chain challenges. If disruption and shortages persist, GBP could find itself struggling.