Pound Australian Dollar (GBP/AUD) Exchange Rate Yo-Yos but Remains Down on the Day
(Updated 16:00, 11/01/23) The Pound Australian Dollar (GBP/AUD) exchange rate fluctuated today but failed to regain ground lost overnight. At the time of writing, GBP/AUD is trading at AU$1.7569. This is 0.3% down on the day but up from an earlier low of AU$1.7539.
The Australian Dollar (AUD) made gains against the Pound (GBP) during overnight trade between Tuesday and Wednesday. The upside came amid rising bets for further action from the Reserve Bank of Australia (RBA) and stronger-than-expected retail sales growth.
The ‘Aussie’ failed to make further gains through the European session, however, as a souring market mood sapped support for the riskier AUD.
Meanwhile, Sterling was unable to press the advantage. GBP investors remain gravely concerned about the many economic challenges facing the UK. As the country enters a recession, strike action continues to intensify and the government is scaling back energy support for businesses. The coming year could bring even more turmoil for the British economy.
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Pound Australian Dollar (GBP/AUD) Exchange Rate Slides as Aussie Reports Cheer AUD Investors
The Pound Australian Dollar (GBP/AUD) exchange rate is weakening today after strong Australian data overnight has given the ‘Aussie’ a significant boost.
At the time of writing, GBP/AUD is trading at around AU$1.7559, which is 0.4% higher than this morning’s opening levels.
Australian Dollar (AUD) Firms following Upbeat Data Releases
The Australian Dollar (ADU) strengthened during the overnight session after strong Australian data gave the currency a boost.
Retail sales grew by 1.4% in November, up from October’s 0.4% rise and above forecasts of 0.6%. This was the tenth consecutive month of growth in retail trade, suggesting that the Australian economy remains robust.
At the same time, the monthly CPI indicator rose from 6.9% in October to 7.3% in November. While this figure was as expected, the increase in inflation could prompt the Reserve Bank of Australia (RBA) to further tighten monetary policy in the future.
These tailwinds have carried through into today’s European session. Meanwhile, a bullish tone in markets is giving the riskier ‘Aussie’ a lift.
Pound (GBP) Subdued as Economic Concerns Simmer
The Pound (GBP) is muted this morning, trading with marginal losses against many of its peers, as GBP traders remain concerned about the UK’s economic outlook.
Recently, industry leaders have been warning that the government’s planned reduction in energy support in April could see many UK firms go bust.
In addition, the bitter dispute between the government and unions representing public sector workers continues. Strike action looks set to intensify as more and more workers vote to down tools in protest of below-inflation pay rises.
With the UK economy in recession, fears of businesses going bankrupt and more disruption from industrial action are adding to the country’s bleak outlook.
GBP/AUD Exchange Rate Forecast: Sterling to Remain Weaker?
Economic data is sparse across the board today. As a result, we could see limited movement in the Pound ‘Aussie’ pair.
Risk appetite could be the defining factor for GBP/AUD. If the market sentiment remains fairly upbeat, the riskier Australian Dollar could hold strong against the Pound.
GBP investors will likely be keeping an eye on UK headlines. Any further signs that the British economic outlook is darkening could weigh on Sterling.
Looking further ahead, Australia’s latest balance of trade report is due out overnight. Economists expect it to show a narrowing trade surplus, which may put some pressure on the ‘Aussie’.