Pound Australian dollar (GBP/AUD) trades near three-month low

Pound Australian dollar (GBP/AUD) dented following Australian inflation data

(Updated 15:30, 24/04/24) The pound Australian dollar (GBP/AUD) exchange rate managed to shake off some of its earlier losses this afternoon following the release of Australia’s latest inflation data.

As Wednesday’s European session progressed, the Australian dollar (AUD) closed the session only marginally firming against the majority of its peers after skyrocketing past its counterparts in the first half of today’s session.

Turning to the pound (GBP), a continued lack of macroeconomic data has left Sterling sentiment remaining flat as the currency trades without a clear direction.

At the time of writing, GBP/AUD is trading at around $1.9155, an increase of roughly 0.2% from today’s opening levels.

Original article continues below:

Pound Australian dollar (GBP/AUD) exchange rate slips following Australian CPI data

The pound Australian dollar (GBP/AUD) exchange rate is facing headwinds this morning following the release of Australia’s latest inflation data.

At the time of writing the GBP/AUD exchange rate is trading at $1.9111, down roughly 0.4% from this morning’s opening rate.

Australian Dollar (AUD) climbs following stronger-than-expected inflation reading

The Australian dollar (AUD) is managing to strengthen against the majority of its peers this morning following a stronger-than-expected domestic inflation print.

Australia’s yearly inflation figure for the first quarter of 2024 printed at 3.6%. Although the data fell from a previous reading of 4.1%, it beat forecasts of a predicted drop to 3.4%.

Similarly, the trimmed mean CPI figures, the Reserve Bank of Australia’s (RBA) preferred measure of inflation, also cooled less-than-expected, dipping from 4.2% to 4%, ahead of a 3.8% predicted reading.

The latest inflationary figures have served to underpin the ‘Aussie’ this morning as clear signs of sticker inflation has seen investors reprice their current RBA interest rate decisions, supporting AUD exchange rates this morning.

Diana Mousina, Deputy Chief Economist at AMP, comments:

‘This inflation data will certainly renew some of that debate around whether we actually need to see higher interest rates.

‘We don’t think we will see a further rate hike from here, I just don’t think it’s necessary, but the quarterly inflation data does mean that the risk of a near-term rate cut has absolutely disappeared.’

Pound (GBP) undermined amid absence of data

The pound (GBP) is trimming its recent gains this morning amid a lack of any notable UK economic data.

Sterling enjoyed moderate success in yesterday, following hawkish commentary from Bank of England (BoE) Chief Economist Huw Pill.

Pill said:

‘We still have a reasonable way to go before I am convinced that the persistent momentum in underlying inflation has stabilised at rates consistent with achievement of the 2% inflation target on a sustainable basis.’

As Pill clearly implied that BoE interest rate cuts are still a way off, the pound managed to rise against almost all of its rivals, however is struggling to recreate the same success throughout today’s session.

GBP/AUD exchange rate forecast: Australian PPI in the spotlight?

Looking ahead, the main catalyst of movement for the pound Australian dollar exchange rate for the remainder of the week is likely to be Australia’s latest producer price index (PPI), scheduled for release on Friday.

The index is forecast to report a downturn in producer prices in the first quarter of 2024.

Should the data print as expected, this may undermine AUD exchange rates towards the later stages of the week.

Turning to the pound, a lack of notable UK data releases may leave GBP exchange rates struggling to find a clear direction for the remainder of the week.

Sarah Ebrahem

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