Pound Australian dollar (GBP/AUD) flat amid risk-off flows
(Updated 16:30, 30/05/24) The pound Australian dollar (GBP/AUD) exchange rate has remained subdued moving into this afternoon’s European session amid a further lack of data.
The pound (GBP) is continuing to be uplifted by scaled back Bank of England (BoE) interest rate cut bets, whilst the acutely risk-sensitive Australian dollar (AUD) is being underpinned by this afternoon’s downbeat market mood.
At the time of writing, GBP/AUD is trading at around AU$1.9174, virtually unchanged from today’s opening levels.
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Pound Australian dollar (GBP/AUD) exchange rate muted amid anxious trade
The pound Australian Dollar (GBP/AUD) exchange rate is trading sideways this morning as UK and Australian data is in shorty supply.
At the time of writing the GBP/AUD exchange rate is trading at AU$1.9222, virtually unchanged from this morning’s opening rate.
Australian dollar (AUD) undermined by risk-on flows
The Australian dollar (AUD) is treading water against the majority of its peers this morning amid an absence of impactful domestic data.
Elsewhere, the ‘Aussie’ is undermined by this morning’s cautious market mood.
Signs of persistent inflationary pressures around the globe seem to be weighing on market sentiment today, as last month’s sticky US inflation print have stoked expectations that interest rates will remain higher for longer, particularly from the Federal Reserve.
Mizuho Bank commented:
‘Hotter and stickier than expected global inflation appears to be taking the air out of asset markets. In other words, “Goldilocks” coming undone. And worries about adverse demand impact from higher rates seeping through.’
As an acutely risk-sensitive currency, AUD is struggling to garner attention, at investors opt for safer assets.
Pound (GBP) quiet amid lull in data
The pound (GBP) is trapped in a narrow range against the majority of its peers this morning as a lack of UK data has seen Sterling struggle to find a clear direction.
However, continuing to keep GBP exchange rates afloat this morning are deferred Bank of England interest rate cut expectations.
Following the announcement last week that the UK will hold a general election in July, the BoE have subsequently ceased all public appearances prompting markets to write off a June interest rate cut.
GBP/AUD exchange rate forecast: Chinese data to drive AUD?
Looking ahead, the primary driver of movement in the pound Australian dollar exchange rate tomorrow will likely be the publication of China’s latest PMIs.
Both China’s manufacturing and non-manufacturing indexes are forecast to remain in expansion territory, with the manufacturing index expected to print as 50.5 meanwhile the non-manufacturing index is forecast to come in at 51.5.
Should the data print as expected and confirm two positive readings, the Australian dollar will likely firm on the back of its status as a Chinese proxy currency.
Turning to the pound, a continued lack of UK economic data will likely see GBP exchange rates continue to trade without a clear trajectory into tomorrow.
However, the GBP/AUD exchange rate could also be impacted by risk appetite.
Should the market mood improve, GBP/AUD could weaken, however, if investors remain risk averse, AUD is likely to remain on the back foot against its peers.