Pound Australian dollar (GBP/AUD) exchange rate firms following mixed Chinese data

Pound Australian dollar (GBP/AUD) ticks up despite risk-on flows

(Updated 16:50, 17/05/24) The Pound Australian dollar (GBP/AUD) exchange rate has continued to drift higher this afternoon despite a lack of further domestic data.

As an upbeat mood has prevailed this afternoon, the pound (GBP) has managed to firm against its safer assets on the back of its increasingly risk-sensitive nature.

However, the Australian dollar (AUD) is struggling to capitalise on its acutely risk-sensitive status, as China’s mixed data release continues to weigh on the ‘Aussie’.

At the time of writing, GBP/AUD is trading at around AU$1.9005, an increase of roughly 0.2% from today’s opening levels.

Original article continues below:

Pound Australian dollar (GBP/AUD) exchange rate edges higher after Chinese data

The pound Australian dollar (GBP/AUD) exchange rate is drifting higher this morning following several data releases from China overnight.

At the time of writing the GBP/AUD exchange rate is trading at $1.9008, up roughly 0.2% from this morning’s opening rate.

Australian Dollar (AUD) dented amid mixed Chinese data

The Australian dollar (AUD) is on the back foot against the majority of its peers this morning following some mixed economic data  from China.

Retail sales in China came in below market expectations in April, printing at 2.3% rather than an expectation of 3.8%, and fell from last month’s reading of 3.1%.

Although the data marked a 15th consecutive month of growth in the retail sector, April’s figure came in at the lowest level during this period.

However, China’s industrial production figures exceeded market forecasts in April, coming in at 6.7% rather than a more modest expectation of 5.5%, and increased from a previous reading of 4.5%.

The mixed data reading has served to undermine AUD exchange rates this morning on the back of its status at a Chinese proxy currency.

Further stifling the ‘Aussie’ thus far is an uncertain market mood. As an acutely risk-sensitive currency, this morning’s tepid trading conditions have seen the Australian dollar struggle to garner investor attention.

Pound (GBP) undermined by BoE commentary

The pound (GBP) is trapped in a narrow range against the majority of its peers this morning as a   lull in UK data focuses GBP investors on  Bank of England (BoE) interest rate bets..

Yesterday, BoE official Megan Greene stated that inflation persistence is waning in the UK which saw GBP exchange rates slip. However, Greene also explained that she would need to ‘see evidence’ that inflation is under control before voting for an interest rate cut.

Following a number of mixed messages this week, the pound’s movements are remaining limited as investors likely await more macroeconomic data to solidify current rate cut bets.

GBP/AUD exchange rate forecast: RBA minutes to rock AUD?

Looking ahead, the primary driver of movement for the pound Australian dollar exchange rate in the first half of next week will likely be the minutes from the Reserve Bank of Australia’s g latest policy meeting.

AUD investors will look to the meeting minutes for any hints surrounding the future of monetary policy in Australia.

As markets speculate over whether the RBA will enact a rate hike this year, a dovish undertone in next week’s minutes could see rate hike bets pulled back, and in turn see the ‘Aussie’ slump against its peers.

Turning to the Pound, the start of the week will bring minimal UK data until the release of the latest domestic inflation figures on Wednesday.

Both headline and core inflation are forecast to cool closer towards the Bank of England’s 2% target in April which is likely to undermine Sterling sentiment in mid-week trade should this cement market rate cut bets for June.

Sarah Ebrahem

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