Pound Australian Dollar (GBP/AUD) Exchange Rate Nosedives after Hawkish RBA Meeting
The Pound Australian Dollar (GBP/AUD) exchange rate is plummeting today. Confidence in the Australian Dollar (AUD) has leaped following a hawkish meeting of the Reserve Bank of Australia (RBA). A continued rally in commodity prices is also likely supporting the ‘Aussie’ today. The Pound (GBP) meanwhile is being kept suppressed amid a retreat in global risk appetite.
At time of writing the GBP/AUD exchange rate is at around $1.7202, which is down around -1% from this morning’s opening figures.
Australian Dollar (AUD) Leaps after RBA Interest Rate Decision
The Australian Dollar (AUD) is making significant gains against its rivals today following a hawkish forward outlook from the RBA. The central bank left interest rates unchanged but surprised markets by removing references to a ‘patient’ stance on monetary policy.
GSFM investment strategist Stephen Miller said:
‘The retirement of the ‘patience’ mantra is an acknowledgement that like the rest of the developed country complex, inflation in Australia has and will surprise with its magnitude and momentum.’
Markets had previously been pricing in a 0.25% rate hike at some point in 2022, with bets now on a first hike in June following the Australian federal elections.
The Australian Dollar (AUD) is also likely being bolstered by a further rally to commodity prices. Iron ore, one of Australia’s key exports, is performing especially well amid expectations of high post-lockdown demand in China.
Pound (GBP) Trends Lower amid Risk-Off Market Mood
The Pound (GBP) is struggling against its competitors today amid a risk-off market mood. Trading sentiment has shifted in recent days after accusations of Russian war crimes reduced hopes for a diplomatic solution to the conflict.
After Ukrainian forces retook the town of Bucha, multiple reports emerged of civilian executions and mass graves. Ukraine’s President Volodymyr Zelenskiy said that the country’s forces had seemingly found similar situations in other towns recently recaptured.
Zelenskiy accused Russia of trying to ‘distort the facts’ surrounding the attacks. Russia has repeatedly denied the allegations and has stated that it would present ‘empirical evidence’ of its innocence at a UN security council meeting on Tuesday.
Western nations including the UK have hinted that they may introduce further sanctions against Russia in response to the crimes. This may also be weighing on Sterling today.