Pound Australian dollar (GBP/AUD) dips following PMIs
(Updated 16:30, 01/05/24) The pound Australian dollar (GBP/AUD) exchange rate edged lower as Wednesday afternoon’s session progressed following the release of both UK and Australian PMI data.
As the more risk-sensitive currency, the Australian dollar (AUD) is being undermined by this afternoon’s anxious trading conditions, however, is managing to firm against the pound (GBP).
Sterling sentiment has remained mostly muted this afternoon amid a lack of any further economic data, and will likely continue to trade flat ahead of the Federal Reserve’s upcoming interest rate decision later this evening, which will likely rock the global market.
At the time of writing, GBP/AUD is trading at around AU$1.9239, a decrease of roughly 0.2% from today’s opening levels.
Original article continues below:
Pound Australian dollar (GBP/AUD) exchange rate muted following PMIs
The pound Australian dollar (GBP/AUD) exchange rate is trading in a narrow range this morning, , following the release of both UK and Australian PMI data.
At the time of writing the GBP/AUD exchange rate is trading at $1.9281, virtually unchanged from this morning’s opening rate.
Australian dollar (AUD) undermined by PMI
The Australian dollar (AUD) is flat against the majority of its peers this morning following the release of the finalised Judo Bank manufacturing PMI.
Factory sector growth was revised lower in April’s finalised data. The index rising from 47.3 to 49.6, as opposed to 49.9 in the preliminary reading.
Confirmation that the manufacturing sector remained in contraction acted as a headwind for the ‘Aussie’ in overnight trade.
Further pressuring the acutely risk-sensitive ‘Aussie’ this morning is a bout of cautious trade, likely due to the Federal Reserve interest rate decision later this evening, with nervous investors shying away from riskier assets ahead of the announcement.
Pound (GBP) holds steady following UK PMI
The pound (GBP) is managing to stay afloat against the majority of its peers this morning following the release of the UK’s own PMI data.
April’s finalised manufacturing index dropped from a 20-month high of 50.3 in March to 49.1 amid deteriorating market confidence, but beat preliminary forecasts the index would drop to 48.7.
Rob Dobson, Director at S&P Global Market Intelligence, comments:
‘The UK manufacturing sector suffered a renewed downturn in April, as output and new orders contracted following short-lived rebounds in March. The sector is still besieged by weak market confidence, client destocking and disruptions caused by the ongoing Red Sea crisis, all of which are contributing to reduced inflows of new work from domestic and overseas customers, with specific reports of difficulty securing new contract wins from Europe, the US and Asia.’
Although the data printed above expectations, confirmation that the factory sector slipped back into contraction has been enough to undermine the pound this morning.
GBP/AUD exchange rate forecast: Australian trade data to drive movement?
Looking ahead, the main catalyst of movement for the pound Australian dollar exchange rate for the remainder of this week is likely to be Australia’s latest balance of trade.
As Australia’s trade surplus is expected to rise from AU$7.28bn to AU$7.30bn in March, should the data match expectations, this could see AUD exchange rates buoyed towards the end of the week.
On Friday, Australia will release its finalised services PMI, which is forecast to slightly cool, however is expected to remain in expansion territory, which could offer the ‘Aussie’ some modest support.
The UK will also release its final services PMI data on Friday, which is predicted to rise even further in April which could see GBP exchange rates end the week on a positive note.