Pound Australian Dollar exchange rate stumbles following upbeat ‘Aussie’ data
The Pound Australian Dollar (GBP/AUD) exchange rate is losing ground this morning, as the latest Australian trade data and an improving market mood serve to lift the risk-sensitive ‘Aussie’.
At the time of writing the GBP/AUD exchange rate is trading at around AU$1.8979, down approximately 0.2% from this morning’s opening rate.
Australian Dollar (AUD) boosted by trade data
The Australian Dollar (AUD) firmed overnight as the latest balance of trade data reported a surge in Australia’s trade surplus.
Hitting an eight-month high, Australia’s trade surplus came in at AU$11.437 million, smashing expectations of AU$7.5 million. However, a larger-than-expected decline in imports, falling to -7.9% capped AUD’s upside potential, casting a shadow over positive export growth, at 1.7%.
Also lending the risk-sensitive ‘Aussie’ some support throughout today’s European session is a cheery market mood. AUD may strengthen on risk appetite as today’s session continues.
Pound (GBP) wavers as UK data remains sparse
The Pound (GBP) is struggling to find a clear direction this morning as UK data remains in short supply.
Investors remain reluctant to place aggressive bets on GBP in the wake of Bank of England (BoE) Governor Andrew Bailey’s underwhelming address in parliament yesterday. Anticipations that Bailey would address the proximity of interest rate cuts this year were met with disappointment, as the BoE figurehead skirted the topic.
Bailey stated in front of the UK Treasury Committee:
‘Obviously we have had a big change in market interest rates in the last few months and so the cost of mortgages is coming down but let’s just take the market for a moment – obviously that is feeding through into mortgage costs and I hope that is something that continues.’
With a lack of notable UK data for the remainder of today’s session, GBP is likely to remain muted ahead of tomorrow’s key data releases.
Pound Australian Dollar exchange rate forecast: UK GDP in Focus
Looking ahead, the UK’s highly impactful GDP data is due for release tomorrow and is likely to be the core catalyst of GBP movement. Economists expect to see 0.2% economic growth in November’s report, edging higher from the previous month’s 0.3% contraction. Confirmation of economic expansion throughout the ‘golden quarter’ may serve to lift Sterling sentiment, as signs of a resilient economy quell UK recession worries.
Across the pond, Australian data is in short supply for the remainder of the week. However, the latest Chinese inflation data is likely to drive AUD volatility, due to the Australian Dollar’s status as a proxy currency for the Chinese economy.
Economists forecast continued disinflation in China’s economy, with an expected reading of -0.4%. This could drive concerns of a loosening Chinese economy, thereby denting the ‘Aussie’.
The Pound Australian Dollar Exchange currency pairing also remains vulnerable to shifts in risk appetite as the session continues. Any movement towards upbeat trade may see the risk-sensitive ‘Aussie’ firm against GBP.
However, as escalating conflict in the Middle East pushes jittery investors towards safe-haven currencies amid gloomy trading conditions, GBP could edge higher against AUD.