Pound Australian Dollar (GBP/AUD) Quiet during Absence of Data
The Pound Australian Dollar (GBP/AUD) exchange rate is fluctuating in a narrow range this morning amid a lack of notable economic data.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.9123, virtually unchanged from this morning’s opening rate.
Pound (GBP) Quiet amid Absence of Data
The Pound (GBP) is moving without a clear direction today, shifting under a lack of data and Bank of England (BoE) commentary.
An increasingly hawkish rhetoric adopted by BoE policymakers in recent days has moderately buoyed Sterling while economic figures remain sparse.
Megan Greene, BoE policymaker, followed in her cohort’s footsteps last night, commenting:
‘Policy may have to be restrictive for an extended period of time in order return inflation to 2% over the medium-term.
‘I think that there is not only a risk of weaker activity than expected, there’s also a risk of stronger activity than expected, and that’s why I continue to put my focus on inflation persistence.’
However, despite the BoE’s ‘higher for longer’ narrative regarding interest rates, Sterling’s upside potential continues to be undermined by a lack of UK data. While investors and analysts alike widely expect a further interest rate hold on 14 December, UK economic gloom continues to sour Sterling sentiment in the meantime.
Australian Dollar (AUD) Muted despite Upbeat Chinese Data
The Australian Dollar (AUD) is rangebound this morning in the wake of strong Chinese data.
With Australian data in short supply, investors look to Chinese economic reports, due to AUD’s status as a proxy currency for the Chinese economy.
China’s Caixin manufacturing PMI survey came in overnight, breaking into growth territory, with the index printing at 50.7. Despite hitting a three-month high, concerns of economic dissonance prevented the data from driving significant AUD movement.
Economists at HSBC commented on yesterday’s strengthening Chinese data:
‘The economy is running at different speeds across industries, though we expect the policy stance to remain proactive which will help to sustain overall growth momentum into the coming quarters.’
While higher-than-forecast economic activity in China’s vital manufacturing sector offered the ‘Aussie’ some initial support overnight, AUD appears to have quickly retreated during European trading hours.
A cautiously downbeat market mood also looks to capping the risk-sensitive Australian Dollar’s gains this morning, leaving AUD to trade sideways ahead of impactful data releases next week.
Pound Australian Dollar Exchange Rate Forecast: RBA Rate Decision in Focus
Looking ahead, the Reserve Bank of Australia (RBA) is due to deliver its latest interest rate decision on Tuesday. Economists currently expect to see a series of consecutive rate holds deep into 2024, which may serve to undermine AUD movement in the coming days. Should the RBA enact a widely anticipated interest rate hold next week, the ‘Aussie’ may slump amid pared rate hike bets.
Looking to the UK, finalised PMI data is due on Tuesday. The vital services sector is forecast to show economic expansion in November, coming in at 50.5, putting an end to a three-month contraction. Should the index print in line with last week’s preliminary readings, GBP may enjoy some modest support, amid confirmation of improving economic activity.
In the meantime, the Pound Australian Dollar exchange rate may be vulnerable to shifts in risk appetite. A spell of cheery trade may see the risky ‘Aussie’ firm against its safer rivals.