Pound Australian Dollar Exchange Rate Buoyed Copper Price Collapse
The Pound Australian Dollar (GBP/AUD) exchange rate is trading higher this afternoon as the ‘Aussie’ is pressured by a sharp decline in copper prices.
At the time of writing the GBP/AUD exchange rate is trading at around $1.8686. Up roughly 0.2% from this morning’s opening rate.
Pound (GBP) Remains Muted amid BoE Rate Hike Comments
The Pound (GBP) is broadly rangebound today as a lack of data leaves Stirling to trade without strong direction.
GBP exchange rates remain muted following comments from Bank of England (BoE) policymaker Ben Broadbent, in which he suggested there are signs UK inflation is easing.
Speaking at an event hosted by the National Institute of Economic and Social Research (NIESR) this morning, Broadbent said:
‘In the last three months, notwithstanding the release we had last week, there are signs in the official data and also in the surveys of some of that pressure starting to come off – not nearly to the extent that we need it to, but some of it just may be beginning to turn.’
When pressed on the topic of raising interest rates, Broadbent stated that the BoE wouldn’t rule out any specific moves ahead of its monetary meeting next month, lending limited support to the Pound.
Australian Dollar (AUD) Falling amid Risk-off Mood & Copper Freefall
The Australian Dollar is retreating today as the risk-off market mood from last night’s session continues. Leading investors to favour safe-haven currencies, and shun the risk-sensitive AUD.
Another key factor that’s weighing on AUD is the recent price fall in copper. Falling from a high of 4.1743 to a low of 3.8626, the Australian Dollar has followed the plunge in copper prices.
While copper is not Australia’s largest export, there are concerns this fall could soon be mirrored in key Australian commodity exports such as iron ore, which has unnerved AUD investors today.
Pound Australian Dollar Exchange Rate Forecast: Slowing Inflation to Weigh on AUD?
Looking ahead the Pound Australian Dollar (GBP/AUD) exchange rate may strengthen tonight following the publication of Australia’s consumer price index.
Economists forecast domestic inflation will have slowed from 7.8% to 6.9% in the first quarter of 2023. Will this slowdown weaken Reserve Bank of Australia (RBA) interest rate expectations and pull the ‘Aussie’ lower?
For GBP investors the focus tomorrow may be on the Confederation of British Industry’s latest distributive trades index. If April’s figures report retail sales volumes stalled this month the Pound may stumble.