Pound Australian Dollar (GBP/AUD) exchange rate slips from one-week high
The Pound Australian Dollar (GBP/AUD) exchange rate is treading water this morning after spiking to a one-week high during last night’s trading session.
At the time of writing the GBP/AUD exchange rate is trading at AU$1.9350, having fallen back after striking AU$1.9423 in overnight trade.
Australian Dollar (AUD) revived by risk-on flows
The Australian Dollar (AUD) is firming this morning against the majority of its peers, clawing back its overnight losses.
The ‘Aussie’ dipped in overnight trade, hitting two-week lows against some of its counterparts, however this morning, cautiously cheery trade is lending the risk-sensitive currency some support.
Further keeping AUD exchange rates afloat this morning are reports that China will lift its wine tariff on Australia, by March of this year.
With tariffs of up to 200%, and the Chinese market accounting for roughly 40% of Australian wine exports, next month’s lift will be a welcomed change for the Australian economy.
Pound (GBP) muted ahead of BoE speech
The Pound (GBP) is trapped in a narrow range this morning as GBP investors await a speech from Bank of England (BoE) Deputy Governor, Dave Ramsden.
Should Ramsden provide any forward guidance surrounding future monetary policy, and skew hawkish in his remarks, this may offer Sterling some support.
Cushioning any further losses this morning are reports that UK food inflation came in at a 2 year low in February, due to sinking energy costs and supermarket price wars.
A survey from the British Retail Consortium (BRC) shop price index saw that food prices rose to 5% in February, falling from January’s 6.1% figure, and printed at the lowest level since May 2022.
GBP/AUD exchange rate forecast: Australia’s monthly CPI indicator to boost the Australian Dollar?
Looking ahead, the primary catalyst of movement for the Pound Australian Dollar exchange rate on Wednesday is likely to be Australia’s latest monthly CPI indicator.
Inflation in January is forecast to have risen from 3.4% to 3.6%. Could this stoke Reserve Bank of Australia (RBA) interest rate hike expectations and lift the ‘Aussie’?
Following that, on Thursday Australia’s latest retail sales are due out for January. After December saw the steepest drop in retail sales in Australia since the summer of 2022, coming in at -2.7%, January’s figure is forecast to have shot up, to 1.5%. Should the data print as expected, this may Bouy the Australian Dollar towards the end of the week.
Turning to the Pound, BoE policymaker, Catherine Mann, is due to deliver a speech on Wednesday afternoon.
As one of the more hawkish members of the Monetary Policy Committee, any deviation from her otherwise hawkish narrative may send GBP exchange rates tumbling, amid further interest rate cut speculation.