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GBP/AUD Exchange Rate Fluctuates Ahead of BoE Speech

Australian Dollar (AUD) bank notes

Pound Australian Dollar Exchange Rate Wavers whilst Awaiting Speech

Trade in the Pound to Australian Dollar (GBP/AUD) exchange rate is mixed this morning ahead of a scheduled speech by Bank of England (BoE) Governor Andrew Bailey.

At the time of writing, the GBP/AUD exchange rate is trading at around AU$1.8539 with minimal market movement.

Pound (GBP) Dropping Ahead of BoE Speech

The Pound (GBP) is falling against many of its peers this morning as Northern Ireland protocol negotiations continue to weigh on Sterling sentiment by casting uncertainty over the future trade relationship between the UK and EU.

Meanwhile the Confederation of British Industry’s (CBI) Distributive Trades index, released this morning, printed above expectations in November. The CBI latest retail sales balance climbed from 30 to 39, outpacing expectations for a more modest rise to 34.

Later this afternoon, the Bank of England’s (BoE) Governor, Andrew Bailey, is scheduled to speak. .

During the November meeting, BoE policymakers weighed up inflation concerns against the slowing growth in the global economy.

In response, policymakers – including Bailey – voted to hold interest rates at a record-low of 0.1% by a majority of 7-2 and to uphold the current bond-buying programme by a majority of 6-3.

Bailey’s speech could weaken the Pound if dampens December rate hike expectations by echoing the dovish remarks made over the weekend.

Australian Dollar (AUD) Suffers amid Risk-Off Mood

The Australian Dollar (AUD) is slipping against the majority of its peers this morning amid risk-off sentiment.

Despite the lack of data today and closure of US markets for Thanksgiving celebrations, USD is still rallying following yesterday’s data dump which is reducing demand for risker assets.

Since the opening of today’s session, AUD has dropped considerably against the ‘Greenbank’ and is trading lower than overnight.

Moreover, the New Zealand Dollar (NZD) has weakened since Reserve Bank of New Zealand (RBNZ) hiked rates for second consecutive month which has placed further pressure on AUD.

On Friday, Australia Retail Sales MoM is expected to be released. In September, the retail sales increased for the first time since May, by 1.3%, rallying from August’s low figures.

October’s Retail Sales are forecast to report an acceleration of sales growth to 2.5% which could help to bolster the appeal of the ‘Aussie’.