GBP/AUD Exchange Rate Falls, Positive Risk Sentiment Uplifts Australian Dollar
The Pound Australian Dollar exchange rate fell by -0.4% today as risk-on market mood has boosted demand for the risk-sensitive ‘Aussie’. The pairing is currently fluctuating around AU$1.79.
The Australian Dollar (AUD) strengthened against Sterling today as positive market mood has driven up demand for risky assets like the ‘Aussie’
Growing confidence in the US economy has also improved global risk sentiment and uplifted investors’ confidence in the Australian economy.
Larry Fink, BlackRock chief executive, recently commented:
‘I am incredibly bullish on the markets. I believe because of monetary stimulus, fiscal stimulus, cash on the side lines, earnings, markets are OK. Markets are going to continue to be stronger.’
Additionally, news about the US and China agreeing to climate change commitments has also buoyed optimism in Washington-Beijing relations, which are showing signs of improving.
A joint statement from the two powers said:
‘The United States and China are committed to cooperating with each other and with other countries to tackle the climate crisis, which must be addressed with the seriousness and urgency that it demands.’
Pound (GBP) Exchange Rate Struggles Despite Falling UK Unemployment
The Pound (GBP) struggled against the Australian Dollar (AUD) today despite UK unemployment levels falling for their second month in a row in February.
ING Developed Markets Economist James Smith commented:
‘The UK jobs market has proved fairly resilient through the latest lockdowns.
‘The latest unemployment rate covering the three-month period to February dipped to 4.9% – and new weekly data suggests it has gone as low as 4.6% during that time. More timely payroll data dipped back slightly in March but also suggests that – outside of the hard-hit consumer services sector – other parts of the jobs market are beginning to turn a corner.’
However, UK markets are becoming more optimistic about the UK economy after the Government eased some lockdown restrictions last week.
Now that non-essential shops have reopened along with pubs and restaurants, GBP investors are becoming confident that the UK economy could quickly begin to recover.
Pound Australian Dollar (GBP/AUD) Exchange Rate Forecast: Could Strong Australian Retail Sales Boost the ‘Aussie’?
Pound (GBP) traders will be awaiting tomorrow’s speech from the Bank of England’s (BoE) Governor Andrew Bailey.
If Mr Bailey reiterates his upbeat comments about the UK economy, then the Pound Australian Dollar exchange rate would head higher.
Tomorrow will also see the release of the latest UK Consumer Price Index for March.
Any signs of a recovery in the British economy would be GBP-positive.
Australian Dollar (AUD) traders will be eyeing tomorrow’s publication of the flash Australian Retail Sales report for March.
If this shows an improvement in Australia’s economy, then the GBP/AUD exchange rate could continue to suffer.