Pound Australian Dollar (GBP/AUD) Exchange Rate Rangebound amid Softer BoE Bets
(Updated 14/04/23 08:51)
The Pound Australian Dollar (GBP/AUD) exchange rate is trading in a narrow range this morning. A mixed market mood could be dampening interest in the pairing.
The exchange rate may be finding continued support from the prospect of further interest rate hikes from the Reserve Bank of Australia (RBA), however. Thursday’s jobs data pointed to a robust labour market, with traders pricing in the need for additional policy tightening.
On the other hand, the prospect of a slowdown in policy tightening from the Bank of England (BoE) may be weighing on the pair this morning. Signals from BoE Chief Economist Huw Pill that UK inflationary pressures may be easing prompted a pullback in bets from markets.
At time of writing, the GBP/AUD exchange rate is at around AU$1.8488, virtually unchanged from this morning’s opening figures.
Pound Australian Dollar (GBP/AUD) Exchange Rate Tumbles as Markets Continue to Price in RBA Rate Hike
(Updated 16:45 13/04/23)
The Pound Australian Dollar exchange rate has continued to drop today. A return of global risk appetite may have contributed to the pairing’s deeper losses over the course of the day.
Markets continued reactions to the day’s data releases may also have prompted the movement in GBP/AUD today. Bets on further Reserve Bank of Australia (RBA) interest rate hikes solidified over the day following the strong Australian employment data. This could have kept pressure on the exchange rate.
Speaking on the data, Anna Milne of Wilson Asset Management said:
‘This increases the likelihood of a further and likely final rate hike at next month’s meeting.’
The poor UK GDP data may have added to GBP/AUD’s downturn today. Investors continued to lose confidence in the UK’s economic recovery.
Strong performance in iron the ore markets may also have dented confidence in the pairing today.
At time of writing the GBP/AUD exchange rate is at around AU$1.8484, which is down roughly 0.9% from this morning’s opening figures.
Original article continues below:
Pound Australian Dollar (GBP/AUD) Exchange Rate Wobbles after Australian Jobs Report
The Pound Australian Dollar exchange rate is declining today. Downbeat UK GDP figures may be pulling the pairing lower today.
Additionally, the strong Australian jobs report overnight may be deepening losses for GBP/AUD today.
At time of writing the GBP/AUD exchange rate is at around AU$1.8598, which is down roughly 0.3% from this morning’s opening figures.
Australian Dollar (AUD) Rises as Jobs Data Points to Further RBA Hikes
The Australian Dollar (AUD) is climbing today following the release of better-than-expected jobs data overnight. The risk-sensitive ‘Aussie’ may also be benefitting from a return of global risk appetite.
The latest Australian employment data is likely the catalyst for AUD’s gains today. March’s unemployment remained unchanged at 3.5% in February, close to a 50-year low.
Furthermore, employment change figures beat forecasts to increase by 53,000 versus a forecast increase of 20,000.
The data may be increasing bets on further policy tightening from the Reserve Bank of Australia (RBA) despite its previous dovish pivot.
Sean Langcake, Head of Macroeconomic Forecasting for BIS Oxford Economics, said:
‘There are very few signs of weakness in these data and little to suggest the labour market is slackening in a meaningful way. This affirms our expectation that the Q1 CPI print will be a strong one, and we expect to see the RBA raising rates again in May.’
AUD may also be seeing a boost off the back of unexpectedly upbeat Chinese trade data. Exports rose by 14.8%, well over forecasts of a 7% contraction.
Optimism over the data may be short-lived, however. Analysts highlighted a filling of back orders as the likely cause of the jump, with weaker growth expected in the coming months.
Pound (GBP) Slips as UK Economy Stagnates in February
The Pound (GBP) may be edging lower today amid evidence of a stagnation in the UK’s economy. February’s GDP figures missed forecasts of a 0.1% contraction.
Experts highlighted the impact of widespread industrial action on the UK’s economic recovery last month.
Suren Thiru, economics director at accountancy body ICAEW, said:
‘These figures suggest that the economy has lost momentum as sky-high inflation and strike action continue to drag on key drivers of UK GDP, notably services and industrial production.’
February’s industrial production fell by 0.2% versus expectations of 0.2% growth. The data may be adding to the negative sentiment around the UK economy today.
Sterling’s losses could be cushioned by an upward revision in January’s GDP figures. The UK’s Office for National Statistics (ONS) revised January’s data to a 0.4% expansion from 0.3%. The Pound may be finding confidence from increased odds that the UK will dodge a first quarter recession.
GBP/AUD Exchange Rate Forecast: Will Hawkish Signals from Pill Boost GBP?
The Pound could find additional support today following a speech from BoE Chief Economist Huw Pill. If Pill echoes the hawkish comments from BoE Governor Andrew Bailey on Wednesday, then GBP may rise.
Sterling will see no other significant data releases this week, meaning that shifts in BoE rate hike bets could inspire movement in GBP. Domestic headlines could also prompt movement in GBP.
With no data left for the Australian Dollar this week, the ‘Aussie’ could be affected by any significant changes in risk appetite. The mood in the commodity markets could also stimulate changes in AUD’s fortunes.
Any further signs of a lagging economic recovery in China could keep pressure on the Australian Dollar this week.