Pound Australian Dollar (GBP/AUD) Exchange Rate Edges Up amid Darkening Mood
The Pound Australian Dollar (GBP/AUD) exchange rate is ticking higher today as a downbeat mood weighs on the risk-sensitive ‘Aussie’.
At the time of writing, GBP/AUD is trading at AU$1.8204, up by 0.2% on the day.
Pound (GBP) Inches Higher Ahead of Spring Budget
The Pound (GBP) strengthened against the Australian Dollar (AUD) this morning, after initially weakening overnight, as markets await the UK’s Spring Budget.
Chancellor Jeremy Hunt will announce the budget just after midday today, outlining the government’s tax and spending plans.
The government is characterising it as a ‘Budget for growth’, and many analysts expect it to include measures designed to boost the UK economy. An increase in childcare funding has already been revealed, along with an extension of the Energy Price Guarantee.
Sterling seems somewhat muted ahead of the announcement, but hopes of an upbeat budget has helped the Pound firm against the ‘Aussie’.
Australian Dollar (AUD) Softens as Mood Sours
The Australian Dollar, meanwhile, is shedding last night’s gains.
Overnight markets were upbeat following positive Chinese economic data. Industrial production improved in the world’s second-largest economy, while retail sales recovered strongly. This cheered Asian markets, lifting the Australian Dollar.
However, the mood has soured during European trade. The recent failures of three US banks – Silvergate, Signature and Silicon Valley Bank – continue to rattle investors, who fear there may be more trouble on the way.
Furthermore, escalating tensions around the Russia-Ukraine conflict are weighing on markets. Yesterday morning, a Russian fighter jet collided with a US Reaper drone, forcing it down in the Black Sea. This is the first known contact between Russia and the US during the war, and it is causing some anxiety among investors.
GBP/AUD Exchange Rate Forecast: Spring Budget to Boost the Pound?
Looking ahead, Chancellor Jeremy Hunt is due to deliver his Spring Budget around lunchtime today. GBP investors will be hoping for some growth-boosting measures from Hunt. If the Chancellor delivers, Sterling could rise.
Meanwhile, the risky Australian Dollar could be driven by the market mood through the European trading session. The US producer price index in the afternoon could affect risk appetite. A decline in PPI could dent Federal Reserve interest rate rise bets, which could cheer markets and lift AUD.