Pound Australian Dollar (GBP/AUD) Exchange Rate Climbs as Iron Ore Falls Further
(Updated 16:41 14/04/23)
The Pound Australian Dollar (GBP/AUD) exchange rate rallied over the rest of today. The continued slump in iron ore prices may have helped to push the pairing higher over the course of the day.
The protracted downturn in the commodity came after a drop in supplies failed to materialize. Speculation of a cap on Chinese steel output also dented confidence in Australia’s primary export.
At time of writing the GBP/AUD exchange rate is at around AU$1.8528, which is down roughly 0.4% from this morning’s opening figures.
Original article continues below:
Pound Australian Dollar (GBP/AUD) Exchange Rate Trends Sideways amid Risk-On Mood
The Pound Australian Dollar exchange rate is trading in a narrow range today. A risk-on mood may be limiting gains for the pairing as well as dovish signals from Bank of England (BoE) officials.
On the other hand, a poor mood in the commodity markets may be limiting losses for GBP/AUD today.
At time of writing the GBP/AUD exchange rate is at around AU$1.8486, virtually unchanged from this morning’s opening figures.
Australian Dollar (AUD) Pulled Lower by Iron Ore Slump
The risk-sensitive Australian Dollar (AUD) is stumbling today despite an upbeat market mood. The ‘Aussie’ may also be coming under pressure from a sharp slip in coal and iron ore prices.
The poor mood in the commodity markets comes as tropical cyclone Ilsa missed the key Australian iron export hub of Port Hedland. This eased supply concerns and sent the price of iron lower, which may be weighing on AUD.
Warning signs from China’s property sectors may also be denting enthusiasm for the ‘Aussie’ today. Higher mortgage rates and lower property prices have placed pressure on household savings, limiting spending and curtailing China’s economic recovery.
Pound (GBP) Slips amid Mixed BoE Signals
The Pound (GBP) is losing ground against its peers today. A lack of data for Sterling may be leaving the currency vulnerable to lingering headwinds.
GBP could be seeing losses due to expectations of easing inflationary pressures in the UK. The shift in sentiment could be down to dovish comments from BoE Chief Economist Huw Pill on Thursday. Pill hinted that wage growth may be slowing in the UK.
On the other hand, Pill also hinted that persistently low unemployment could be support increased consumption.
Markets took this as a sign that the BoE may pursue further rate hikes. A 25bps from the central bank in May is 80% priced in, and my cushioning GBP’s losses today.
Sterling may also be finding support from the possibility that the UK may dodge a first quarter recession after an upward revision in January’s GDP figures on Thursday.
GBP/AUD Exchange Rate Forecast: Will Slip in UK Employment and Inflation Data Pull Pound Lower?
The Pound could come under further pressure later today following a speech from notably dovish BoE policymaker Silvana Tenreyro.
Looking to next week for Sterling, jobs data on Tuesday could prompt a fresh downturn in the currency. February’s unemployment is expected to rise to 3.8% alongside cooler wage growth data.
Wednesday’s inflation figures could have a similar effect on the Pound if they print as forecast. March’s inflation is set to edge lower which could inspire a pullback in BoE rate hike bets.
Finally for Sterling, Friday’s data releases could cause mixed movements in GBP. March’s retail are set to slump by 0.5% after a 1.2% rebound in February. The poor performance in the sector could see the Pound fall.
On the other hand, a rise in April’s consumer confidence could limit any losses for the currency.
The Australian Dollar may see a boost on Tuesday amid multiple upbeat Chinese data releases. China’s economy is forecast to have growth by 4% in the first quarter of 2023 alongside a rise in industrial production and retail sales.
However, the latest RBA meeting minutes could dampen enthusiasm for the ‘Aussie’. The minutes may reinforce the central bank’s dovish stance after its rate hike pause.
The latest private sector PMIs could pull AUD lower on Friday if they print as forecast. Performance across all sectors in April is expected to fall further into negative territory.