Pound Australian Dollar (GBP/AUD) Exchange Rate Ticks Higher Despite Downbeat Trade
The Pound Australian Dollar (GBP/AUD) exchange rate is firming today, despite a bleak market mood.
At the time of writing, GBP/AUD is trading at around AU$1.8983, an increase of roughly 0.2% from the morning’s opening rates.
Pound (GBP) Pressured by Risk Averse Trade
Data releases are spare for the Pound (GBP) today, which is prompting Sterling to stumble against its peers.
Bank of England (BoE) interest rate cut bets may also be factoring into GBP’s soft trade today. Inflation has continually fallen in the UK, as pressures ease across different factors. Because of this, investors are beginning to anticipate imminent interest rate cuts.
Investors are likely focusing on an upcoming testimony from BoE Governor Andrew Bailey. On Wednesday, Bailey is set to discuss monetary policy with the UK Treasury committee, wherein he is likely to try and downplay imminent rate cuts.
If he proves convincing, it could strengthen Sterling later in the week. However, pressure is likely to be piled on Bailey as the UK economy remains on a knife-edge.
Ultimately, however, the downbeat session is keeping GBP exchange rates restricted, despite gaining some ground against AUD.
Australian Dollar (AUD) Undermined by Downbeat Session
Due to a lull in data releases, the Australian Dollar (AUD) is off to a slow start today. The quiet market mood is preventing the ‘Aussie’ from finding much traction as investors eye safer opportunities.
Tensions in the Middle East continued to develop over the weekend, which has left investors highly concerned. Fears are growing that the conflict between Israel and Palestine will continue to escalate.
Additionally, Israel has begun to launch airstrikes on Lebanon. With the conflict seeming to spread further, the market mood is on a downbeat note. Wider conflict seems to grow more likely by the day, which is prompting fears over oil supplies and hampering commodities trade.
Pound Australian Dollar Exchange Rate Forecast: Australian Retail Recovery to Boost AUD?
Looking ahead for the Australian Dollar, the core catalyst of movement is likely to be the latest retail sales data, due to publish overnight. Sales are expected to have improved by 1.2% in November, which could strengthen AUD.
This is then followed by the monthly inflation indicator. Due to release on Wednesday, November’s reading is expected to have cooled from 4.9% to 4.4%.
This could weigh heavily on the ‘Aussie’ as it may prompt pared back bets on hawkish action from the Reserve Bank of Australia (RBA).
For the Pound, a light data calendar is likely to leave the increasingly risk-sensitive currency exposed to shifts in the market mood.
If the mood sours and bearish trade occurs, the Pound may be unable to find its footing. However, due to AUD being more sensitive to risk appetite, GBP/AUD could strengthen.