April 28, 2021 - Written by John Cameron
STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Steady as Australia’s CPI Falls Below Forecasts
GBP/AUD Exchange Rate Rangebound as Australian Economy Begins to Show Signs of Recovery
The Pound Australian Dollar (GBP/AUD) exchange rate held steady today despite Australia’s latest consumer price index falling below forecasts of 0.9% to 0.6%. The pairing is currently fluctuating around AU$1.79.
The Australian Dollar (AUD) rose despite the nation’s CPI falling well below the Reserve Bank of Australia’s (RBA) target.
CommSec chief economist Craig James expressed confidence in Australia’s economy, however, saying:
‘The economy is recovering much quicker than initially expected and that could mean higher-than-expected price increases and a tighter job market.’
Mr James also added that consumer prices would remain well below the RBA’s targets, with the bank likely to ‘maintain its resolve and keep the cash rate at record lows until 2024’.
Rising demand for the US Dollar has however clipped some demand for the risk-sensitive ‘Aussie’ today as Covid-19 cases continue t o surge in India.
Consequently, the AUD/GBP exchange rate could swiftly fall today if risk sentiment continues to sour.
Pound (GBP) Exchange Rate Rangebound as UK Retail Sales Grow at Their Fastest Rate Since 2018
The Pound (GBP) held steady today after the Confederation of British Industry (CBI) reported the sharpest growth in retail sales since 2018.
As a result, GBP investors have become more confident about the British economy. UK lockdown measures are also expected to be eased in May, promising further improvements on the horizon.
Fraser McKevitt, head of retail at Kantar, commented:
‘There is a growing sense that the worst of the pandemic is behind us, and people are becoming more comfortable with venturing out to the supermarket. The past four weeks have been the busiest in store for the grocers in more than a year.’
In the absence of any notable UK economic data today, the Pound has remained relatively rudderless despite signs that the nation’s Covid-19 infection rates are remaining relatively stable.
Meanwhile, growing tensions between the UK and the EU have dampened demand for Sterling.
The EU is now forwarding its legal case against Oxford’s AstraZeneca as the European Commission criticizes the Anglo-Swedish company for not having a ‘reliable’ plan to ensure timely deliveries of the vaccine.
Pound Australian Dollar (GBP/AUD) Exchange Rate Forecast: Could Souring Risk Sentiment Weaken the ‘Aussie’ This Week?
The Australian Dollar (AUD) will remain sensitive to global risk sentiment this week. If Covid-19 cases continue to rise in places like India, then we could see demand for the risk-sensitive ‘Aussie’ quickly begin to slide.
The Pound Australian Dollar (GBP/AUD) exchange rate could begin to edge higher this week if the outlook for the British economy continues to improve.
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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts