Pound To Australian Dollar Week Ahead Forecast: GBP/AUD Wavers Amid High Impact Data
The Pound Australian Dollar (GBP/AUD) exchange rate traded in a wide last week following the publication of several significant releases.
At the time of writing the GBP/AUD was trading at around AU$1.9804, virtually unchanged from the start of Friday’s session.
The Pound (GBP) began the week trading sideways against the majority of its peers before Tuesday saw a slight uptick in Sterling following the UK’s latest jobs data.
The index revealed an acceleration in wage growth and a lower-than-expected unemployment reading.
However, the Pound’s gains were capped as Bank of England (BoE) Governor Andrew Bailey warned of a ‘weak growth environment’ following the release.
Similarly, on Wednesday, the UK released its latest consumer price index (CPI) which showed the UK’s headline inflation jump to 3%.
However, as the data failed to notably undermine Bank of England interest rate cut bets, the Pound wavered during mid-week trade.
The end of the week saw a number of mixed UK data releases.
The latest retail sales index came in above market expectations, as did the latest services PMI reading, while the latest manufacturing index dropped further below expansion territory.
The Australian Dollar (AUD) began the week slipping against its peers before Tuesday saw the publication of the Reserve Bank of Australia (RBA)’s latest interest rate decision.
The central bank enacted a 25 basis-interest rate cut, however, due to the RBA’s hawkish forward guidance, AUD exchange rates managed to firm.
The latter stages of the week also saw the ‘Aussie’ on the front foot as US President Donald Trump implied that China and the US could reach a trade deal.
As a Chinese proxy currency, this provided AUD exchange rates with some modest support.
Looking ahead, the primary catalyst of movement for the Pound Australian Dollar exchange rate this week will likely be market appetite for risk.
As both UK and Australian data releases are few and far between this week, the GBP/AUD exchange rate could be primarily driven by this week’s market sentiment.
Any move towards upbeat trade could see GBP/AUD exchange rates slip during this week’s trading.
Adam Solomon
Contributing Analyst
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