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Pound Australian Dollar (GBP/AUD) Exchange Rate Rangebound amid Fresh Hopes for NI Protocol Resolution

Pound Australian Dollar Currency Forecast

Pound Australian Dollar (GBP/AUD) Exchange Rate Trends Sideways amid Risk-Off Mood

The Pound Australian Dollar (GBP/AUD) exchange rate is trading narrowly today. A risk-off market mood could be limiting losses for the currency pair. On the other hand, optimism surrounding the Chinese economy could be capping gains for GBP/AUD today.

At time of writing the GBP/AUD exchange rate is at around $AU1.8003, virtually unchanged from this morning’s opening figures.

Pound (GBP) Edges Higher amid NI Protocol Talks Optimism

The Pound (GBP) is ticking higher today despite a retreat in global risk appetite. Renewed optimism regarding UK-EU negotiations over the Northern Ireland protocol may also be helping GBP to gain.

Speaking on Friday, UK foreign minister Simon Coveney said that there had been a ‘significant’ improvement in relations between the UK and the EU.

EU Commission President Ursula von der Leyen echoed the sentiment on Thursday as she stated her belief that a solution was ‘within reach’.

A poor outlook for the UK economy is could be keeping the Pound’s movement’s subdued, however. Data released today indicated a drop in retail footfall despite Black Friday sales.

The prospect of widespread public sector industrial action could also be denting confidence in Sterling. The NHS is set to strike on 20 December.

Australian Dollar (AUD) Ticks Lower amid first Retail Sector Downturn in 2022

The Australian Dollar (AUD) is edging lower today amid a risk-off trading impulse. A rise in iron ore prices could be preventing drastic losses for the ‘Aussie’, however.

Confirmation of a downturn in Australia’s retail sector is likely to be weighing on the currency today. The final reading of October’s sales figures confirmed the sector’s first fall in 2022 amid soaring business costs and reduced household spending power.

China’s announcement that it would begin to ease its Covid-19 restrictions this week could be preventing AUD from falling further, however.

Signals from China’s central bank of further support for the country’s slowing economy may also be limiting losses for the Australian Dollar. The People’s Bank of China (PBO) stated that it will focus on further support for growth amid high inflation.

Finally, hawkish comments from Reserve Bank of Australia (RBA) Governor Philip Lowe could be preventing a further fall for AUD. Speaking on Friday, Lowe signalled that the central bank would be raising interest rate hikes to bring down soaring inflation.

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