Pound Australian Dollar (GBP/AUD) Exchange Rate Ticks Higher as UK & EU Sign NI Deal
(Updated 16:51 24/03/23)
The Pound Australian Dollar (GBP/AUD) exchange rate has trended higher today. The pairing may have been bolstered by a retreat in risk appetite during the day. The exchange rate may have also found support from a further downturn in iron ore prices over the course of the day.
GBP/EUR may have risen later today after news that the UK and EU had formally adopted the Northern Ireland trade deal. The ‘Windsor Framework’ was formally adopted by the two parties in a meeting between UK Foreign Secretary James Cleverly and European Commission Vice-President Maris Sefcovic.
Ahead of the meeting, Foreign Secretary Cleverly said:
‘By formally approving the Windsor framework, we are delivering on our commitment to provide stability and certainty for Northern Ireland. The framework is the best deal for Northern Ireland, safeguarding its place in the Union and protecting the Belfast (Good Friday) agreement. I look forward to further effective cooperation with the EU on key issues, such as security and energy.’
At time of writing the GBP/AUD exchange rate is at around AU$1.8411, which is up roughly 0.2% from this morning’s opening figures.
Original article continues below:
Pound Australian Dollar (GBP/AUD) Exchange Rate Trends Sideways after Poor PMI Releases
The Pound Australian Dollar exchange rate is trading in a narrow range today. The pairing may be coming under pressure from worse-than-expected UK PMI data.
Nevertheless, GBP/AUD could be finding support from above-forecast UK retail sales and poor Australian PMI figures.
At time of writing the GBP/AUD exchange rate is at around AU$1.8384, virtually unchanged from this morning’s figures.
Pound (GBP) Underpinned by Above-Forecast Retail Sales Data
The Pound (GBP) is slipping today. Mixed PMI figures for March could be pulling Sterling lower.
March’s PMI figures fell by more than forecast across all the UK’s private sectors. The UK’s manufacturing sector fell further into contraction amid reduced demand.
On the other hand, the reading for the country’s service sector was more positive. The sector remained in growth and saw business activity rise at its fastest pace in 12 months. The reading may be helping to limit the negative impact of the data.
Sterling may be underpinned by buoyant retail sales data today. Sales figures for February increased by 1.2%, well above the forecast rise of 0.2%. A surge of purchases in supermarkets and discount stores was highlighted as a key driver last month.
The Pound may be also be seeing its losses curbed by upbeat comments from Bank of England (BoE) Governor Andrew Bailey.
Australian Dollar (AUD) Ticks Lower after Disappointing PMIS
The Australian Dollar (AUD) is edging lower against its rivals today. AUD may be coming under pressure from poor PMI figures overnight.
Output across all of Australia’s private sectors slumped in March. Earlier forecasts had been for output to tick lower but remain in positive territory. The services sector reading fell to 48.2 versus the forecast decline to 50.5.
The ‘Aussie’ could be seeing its losses limited by bets on a hawkish move from the Reserve Bank of Australia (RBA) at their next meeting.
The PMI releases indicated that price inflation in the country’s private sectors remains high. Some experts now feel that the RBA may need to hike rates to bring inflation down quicker.
GBP/AUD Exchange Rate Forecast:
Looking to the coming week for Sterling, the currency could be pulled lower by UK retail sector data on Monday. The results of the Confederation of British Industry’s (CBI) March distributive trades survey are expected to fall to -18 from 2.
Sterling could see any losses limited by the final reading of fourth quarter GDP growth data on Friday. The reading is expected to be revised higher, indicating a stagnation rather than a decline.
For the Australian Dollar, poorer retail sales figures on Tuesday could pull the ‘Aussie’ lower. February’s sales figures are expected to rise by 0.5%, down from January’s rise of 1.9%.
A forecast uptick in February’s monthly CPI indicator on Wednesday could have a mixed effect on AUD. On the one hand, evidence of further price increases could dent confidence in the ‘Aussie’.
On the other hand, increased inflationary pressures could prompt bets on additional rate hikes from the RBA. AUD could see a boost as a result.
AUD could see reduced enthusiasm after the latest PMI figures from China on Friday. Output across all of the country’s private sectors is expected to have fallen in March.