GBP/AUD exchange rate sinks as risk appetite improves
The pound Australian dollar (GBP/AUD) exchange rate is trending down this morning, as the Australian dollar (AUD) is supported by a risk-on mood. Given a lack of significant data from the UK, the pound (GBP) remains subdued amid central bank speculation.
At the time of writing, GBP/AUD is trading at a$1.9334, having plummeted by approximately 1.3% in the past 24 hours.
Australian dollar (AUD) enjoys risk-on tailwinds
The Australian dollar is supported this morning by a risk-on mood, as well as better-than-expected data from the Australian Industry Group.
During the early Asian session, the Group’s index revealed that the years-long contraction in industrial activity eased further in July 2024, rising to –20.7 as opposed to the forecast –22. Tailwinds were limited, as overall sector performance was mixed, yet the data marked a move in the right direction.
Meanwhile, China’s July trade surplus fell slightly short of forecasts, printing at $84.65bn from $99.05bn in June. Exports rose by less than expected, while imports rebounded; yet the ‘Aussie’ appeared unaffected by the potentially disappointing release.
Instead, renewed risk appetite appears to buoy AUD, encouraging optimism among traders. Analysts at UOB Group encourage an upbeat outlook:
‘Our expectation for AUD to continue to rebound yesterday did not materialise… The underlying tone still seems firm, and we continue expect AUD to rebound.’
Given a lack of additional Australian data today, the ‘Aussie’ may continue to trade upon risk sentiment and other external factors, such as central bank commentary.
Pound (GBP) trades sideways, house prices rise
The pound is trading broadly sideways against its peers today amid a lack of significant UK data. A risk-on mood supports the currency against its safe-haven peers, while a recovery in house prices may also lend minor tailwinds.
As the Bank of England (BoE) cut interest rates last week and are expected to do so again, mortgage rates are easing, allowing homeowners and sales representatives to price their properties higher. This development will come as a relief to the property industry.
Nathan Emerson, chief executive of property professionals’ body Propertymark, remarks:
‘It is extremely positive to see further growth within the housing sector, especially following what has been a tough time across the last few years for consumers.
With inflation now down at targeted levels and with a very welcome cut in interest rates last week, Propertymark is extremely optimistic to see a real uplift across the housing sector over the coming months.’
As property professionals rejoice, investors will be focused upon discerning the BoE’s next move when it comes to monetary policy. Expectations for a dovish move from the Federal Reserve take some of the pressure off the Bank of England to appear hawkish, given narrowing divergence between the two central banks’ monetary policy outlook.
GBP/AUD forecast: USD dynamics, Australian business confidence in focus?
The pound Australian dollar exchange rate is likely to continue to trade upon risk sentiment today, given a lack of further data from either the UK or Australia.
Fresh data from the United States could have some effect upon GBP/AUD, given the repercussions of US dollar (USD) performance within the currency market. Yet none of today’s scheduled releases are expected to be high-impact, meaning the consequences for USD and its peers is likely to be limited.
Into tomorrow, Australia’s latest business confidence survey may influence AUD performance. Confidence looks to have improved in July, while business inflation expectations are expected to ease; such an outcome could buoy the Australian Dollar.