GBP/AUD Exchange Rate Rangebound as Outlook for Australian Economy Improves
The Pound Australian Dollar exchange rate held steady today despite Australian business conditions hitting a record high in March. The pairing is currently trading around AU$1.80.
The latest National Australia Bank (NAB) Business Conditions survey rose by 8 points to 25 index points from March to February.
Alan Oster, the NAB’S Chief Economist, was confident about the data, saying:
‘This is a very solid survey result. Businesses are telling us activity continues to increase at a very healthy rate … The recovery over the last year has been much more rapid than anyone could have forecast.
‘Conditions tell us activity is lifting strongly, capacity utilization tells us we are already a high level. This is particularly encouraging as we move through the tapering in fiscal support.’
As a result, AUD investors are becoming increasingly confident about Australia’s economic outlook.
However, fluctuating risk sentiment has weakened demand for the risk-sensitive ‘Aussie’ this week, with concerns over Europe’s Covid-19 situation limiting the AUD/GBP exchange rate.
Pound (GBP) Exchange Rate Steady as UK GDP Rises in February
The Pound (GBP) failed to rise against the ‘Aussie’ today despite the latest UK GDP figure rising by 0.4% in February.
Emma-Lou Montgomery, associate director at Fidelity International, said that this paints a ‘rosier picture’ for the British economy.
She also added:
‘There is much reason for optimism. Consumers have enthusiastically returned to the high street, glasses have been raised to the opening of outdoor dining and drinking as restrictions ease and the vaccination programme continues at pace.
‘This all points towards a positive direction of travel for the UK economy.’
UK markets are also more confident about the outlook for the economy after lockdown restrictions were eased for non-essential shops.
This includes pubs and restaurants which are now allowed to serve outdoor customers.
Pound Australian Dollar (GBP/AUD) Forecast: Could a Bullish Bank of England Boost Sterling?
Australian Dollar (AUD) investors will be looking ahead to tomorrow’s release of the Australian Westpac Consumer Confidence report for April.
Any improvement in consumer morale would provide a boost for the AUD/GBP exchange rate.
Risk sentiment will, however, continue to drive or drive away demand for the risk-sensitive ‘Aussie’.
As a result, we could see the Australian Dollar (AUD) benefit if Europe’s Covid-19 situation shows any signs of improvement.
Pound (GBP) traders will be eyeing tomorrow’s speech from the Bank of England’s (BoE) Jonathan Haskel.
If Mr Haskel is notably bullish in his outlook for the British economy, then the Pound Australian Dollar exchange rate would head higher.
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