Pound Australian dollar (GBP/AUD) exchange rate dips in early trade
The pound Australian dollar (GBP/AUD) exchange rate has ticked lower this morning, and is trading at a new one-week low, despite the overnight publication of some mixed Chinese data.
At the time of writing the GBP/AUD exchange rate is trading at $1.9147, down roughly 0.3% from this morning’s opening rate.
Australian dollar (AUD) holds steady following mixed Chinese data
The Australian dollar (AUD) is managing to stay afloat this morning despite the release of China’s latest NBS manufacturing and non-manufacturing PMIs.
In May, the manufacturing index printed below forecast and fell from 50.4 to 49.5 rather than rising to 50.5 as expected, and moved into contraction territory for the first time since February. (A score below 50.)
Meanwhile China’s non-manufacturing index also came in below forecast, however remained in expansion territory. The index came in at 51.1, falling marginally from last month’s reading of 51.2, but missing market expectations it would rise to 51.5.
This marked the service sector’s 17th consecutive month of growth, although this was also the smallest expansion since January.
Despite the Australian dollar’s nature as a Chinese proxy currency, the ‘Aussie’ has managed to firm during today’s European session, after dipping overnight in the immediate aftermath of the release.
Pound (GBP) continues to waver amid lack of data
The pound (GBP) is struggling to garner investor attention this morning, and is dipping against the majority of its peers, as an ongoing absence of UK data this week sees Sterling continue to struggle to find direction.
Meanwhile growing UK economic pessimism appears to be undermining Sterling sentiment today.
This follows a report from the Institute for Fiscal Studies which suggests that UK consumers are being squeezed after median incomes rose just 6% over the past 15 years.
Mubin Haq, Chief Executive of ABRDN Financial Fairness Trust, says:
‘Unfortunately, living standards have languished for more than a decade. On a range of measures UK performance has been weak, especially in comparison to other wealthy countries. The danger is that stagnation becomes the new normal. This is in no one’s interests and stunts too many futures and too many lives.’
GBP/AUD exchange rate forecast: PMIs in focus
Looking ahead, the main catalyst of movement for the pound Australian dollar exchange rate at the beginning of next week is likely to be the publication of both the UK’s and Australia’s finalised manufacturing PMIs for May.
In Australia, the index is expected to confirm a reading of 49.6 which would mark a fourth consecutive month of contraction. Should the data print as expected, this could undermine the ‘Aussie’ at the start of next week.
Turning to the pound, the UK’s manufacturing index is forecast to rise from 49.1 to 51.3 and is set to enter expansion territory. If the data matches the preliminary reading, this could see Sterling begin the week on the front foot.