The Pound Australian Dollar (GBP/AUD) exchange rate fluctuated last week. The pairing closed the session higher following an upward revision to fourth quarter UK GDP. Cooler Australian inflation figures also helped GBP/AUD recover lost ground.
What’s Been Happening: Pound Bolstered by Surprise Upward GDP Revision
The release of optimistic UK retail data initially boosted the Pound on Monday. The Confederation of British Industry’s (CBI) latest distributive trades survey pointed to renewed optimism in the sector and resilient sales, pushing GBP/AUD higher.
Better-than-forecast Australian retail sales allowed the Australian Dollar (AUD) to quickly rebound.
However, persistent Bank of England (BoE) rate hike bets helped GBP/AUD recover lost ground during the European session.
Wednesday’s Australian consumer price index helped the to consolidate the pairing’s gains. The ‘Aussie’ came under pressure inflation in February cooled more-than-forecast. The figures strengthened market expectations of a slowdown in policy tightening from the Reserve Bank of Australia (RBA).
A surprise revision to fourth quarter UK GDP figures on Friday inspired additional positive movement in the Pound. The UK economy was shown to have expanded by 0.1% in the final quarter of last year.
Weekly highlights
- RBA Interest Rate Decision
The central bank is widely expected to leave interest rates unchanged. Will a rate hike pause pull the ‘Aussie’ lower?
- UK Services PMI
March’s output data is expected to remain in positive territory. Could the positive signs for the UK’s dominant sector boost the Pound?
- BoE Policy Summary
Will the release BoE’s recent summary on Tuesday prompt renewed rate hike bets and inspire gains for Sterling?
GBP/AUD Forecast
With little other significant data, the Pound could be affected by BoE interest rate expectations and domestic headwinds.
The latest private sector data from China could boost AUD this week if it points to a continued recovery in the world’s second-largest economy.