Pound Australian Dollar (GBP/AUD) Exchange Rate Slumps amid Upbeat Trade
The Pound Australian Dollar (GBP/AUD) exchange rate is stumbling this morning as global markets see an increasing appetite for risk.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.9175, down approximately 0.3% from this morning’s opening rate.
Australian Dollar (AUD) Rebounds despite Weak GDP
The Australian Dollar (AUD) is firming this morning amid a spell of cheery trade, despite the latest GDP data missing forecasts.
Australian growth in the third quarter came in lower than anticipated overnight, at 0.2%. Today’s data shows a decline from second quarter growth, as well as missing forecasts of 0.4%.
Although economic slowing may serve to undermine Reserve Bank of Australia (RBA) interest rate bets in coming days, Australian politicians argue that the economy remains resilient.
Jim Chalmers, Treasurer of Australia in the Albanese government, commented:
‘Our economy grew faster than most of the major advanced economies through the year to the September quarter – faster than Germany, the UK, France, Canada and Italy.
‘[W]e have anticipated for some time a substantial slowing in our economy as the inevitable consequence of higher interest rates and global uncertainty.’
Despite political optimism, AUD may slump as the session continues, with sluggish growth and yesterday’s RBA rate hold serving to pare rate hike bets. However, an increasing risk appetite is ultimately boosting the risk-sensitive ‘Aussie’ in the interim.
Pound (GBP) Wavers ahead of BoE Speech
The Pound (GBP) is fluctuating ahead of a speech from Bank of England Governor Andrew Bailey later this morning.
As UK data remains in short supply, GBP remains vulnerable to an improving appetite for risk, slumping against its more risk-sensitive peers.
Later today, Bailey is expected to reiterate the BoE’s hawkish stance regarding interest rates while speaking. BoE policymaker’s have recently argued that tighter monetary policy may be necessary for an extended period, though a lack of supporting economic data has left investors reluctant to place any aggressive bets on Sterling in the meantime.
As such, GBP may struggle to find a clear direction today.
Pound Australian Dollar Exchange Rate Forecast: Hawkish Commentary to Boost GBP?
Later this morning, a speech by BoE Governor Andrew Bailey could drive GBP volatility. Bailey is likely to advocate for restrictive monetary policy during his address. However, amid an ongoing lack of data to underpin the BoE’s hawkish narrative, Bailey’s words may fall flat, leaving GBP ultimately rangebound.
Across the pond, the latest Australian trade data is forecast to show a widening in the export-heavy economy’s trade surplus tomorrow. The commodity-driven ‘Aussie’ may garner some investor interest should Australian trade show signs of expansion.
Also due out tomorrow is China’s latest trade data. Due to AUD’s status as a proxy currency for the Chinese economy, a forecast expansion in China’s trade surplus could lift the Australian Dollar. Similarly, with exports forecast to have contracted at a slower pace through November’s year-on-year reading, signs of economic recovery may lend AUD some support.
In the meantime, the Pound Australian Dollar exchange rate may remain vulnerable to shifts in risk appetite. An increasingly upbeat mood may continue to buoy the ‘Aussie’.