The Pound Australian Dollar (GBP/AUD) exchange rate wavered in a wide range last week, as PMI data and UK GDP inspired movement alongside tensions in Ukraine.
What’s Been Happening: Sterling Gains on UK GDP, Dented by Ukraine Headwinds
The Pound (GBP) spiked against the Australian Dollar (AUD) early in the week, as negotiations over the Ukraine conflict appeared to be bearing fruit.
Russia seemed to be scaling back the ambition of its invasion, as Russian Defence Minister Sergei Shoigu defined the army’s main goal as being the liberation of Donbas.
However, a dovish stance from the Bank of England (BoE) capped Sterling gains while the ‘Aussie’ benefitted from upbeat AU retail data. Sales grew by 1.8% in February, according to preliminary reports.
Positive manufacturing data also lent AUD upside later in the week, as the country’s March PMI exceeded expectations. On the other hand, manufacturing activity fell in the UK, missing predictions.
Sterling climbed briefly on Thursday as UK GDP data printed at 1.3% – rather than the 1% forecast; weighing upon the Pound at the end of the week, however, was an increase in household bills, inspiring the moniker ‘Bleak Friday’.
Three Things to Watch Out for This Week
- RBA Interest Rate Decision
The Reserve Bank of Australia (RBA) is expected to leave interest rates as they stand tomorrow, inspiring potential bearishness amongst AUD investors.
- Services Data
Both the UK and Australia are scheduled to release services data this week. Both are expected to reveal an increase in March’s activity, lending possible tailwinds.
- Ukraine Conflict
Conflict is set to intensify in Ukraine as European countries join in condemning Russia’s attacks on civilians. Spain’s Prime Minister has openly accused Russia of genocide.
Pound Australian Dollar Forecast
Bank of England (BoE) dynamics may influence GBP/AUD today, as Andrew Bailey is expected to hint at the central bank’s May policy action.
Later in the week, Australia’s trade balance could inspire movement, while Chinese service-sector data may weigh upon AUD if it reveals a decrease in March’s activity, as expected.