Pound Australian Dollar (GBP/AUD) Exchange Rate Rises as UK Car Sales Rallied in April

May 5, 2021 - Written by John Cameron

STORY LINK Pound Australian Dollar (GBP/AUD) Exchange Rate Rises as UK Car Sales Rallied in April

GBP/AUD Exchange Rate Edges Higher on UK Economic Optimism

The Pound Australian Dollar (GBP/AUD) exchange rate rose today following the latest report from the UK’s Society of Motor Manufacturers and Traders (SMMT), which revealed that the nation’s car sales rallied in April. The pairing is currently fluctuating around AU$1.80.

Analysts at Reuters commented on the SMMT report:

‘Last month, customers were able to buy cars in person from April 12 in England whilst delivery, click and collect and online services also facilitated purchases. Plants have continued to operate with COVID safe measures in place.

‘Sales stood at around 141,000 vehicles last month, still down 13% on the 2010-2019 monthly average, the Society of Motor Manufacturers and Traders (SMMT) said on Wednesday.’

Sterling rose against the ‘Aussie’ today as the UK economy continues to show signs of growth now that lockdown restrictions have been eased.

May 17th will also see lockdown restrictions further lifted as the nation cautiously reopens its economy.

As a result, GBP investors are becoming increasingly confident about the outlook for the nation’s economy.

In the absence of UK economic data today, we could still see the Pound Australian Dollar exchange rate edge higher.

The nation’s Covid-19 infection rates continue to fall, with daily deaths down by -13 compared to last week.

Confidence in the steady reopening of the UK economy and the success of the Government’s vaccine rollout programme will continue to prove GBP-positive throughout today’s session.

Australian Dollar (AUD) Exchange Rate Dips Despite Strong Australian Building Approvals Data in March

The Australian Dollar (AUD) failed to rise against the Pound (GBP) today despite a stronger-than-expected Australian building permits figure for March. The figure beat forecasts rising by 17.4%.

Daniel Rossi, Director of Construction Statistics at the ABS, commented on the data:

‘The total number of dwellings approved in March was the second highest recorded, only exceeded by the November 2017 result. The number of private sector house approvals also remained at elevated levels due to HomeBuilder, edging up 0.1 per cent to a new record high in March.’

AUD traders have become more hopeful about Australia’s economic recovery as building permits are showing encouraging growth in the first quarter of this year.

The ‘Aussie’ has also suffered from mixed risk sentiment today, as markets remain cautious about India’s significant rise in Covid-19 infections.

Consequently, demand for risky assets such as AUD have tapered off this week.

GBP/AUD Exchange Rate Outlook: Could a Dovish RBA Limit the ‘Aussie’ Tomorrow?

Australian Dollar (AUD) investors will be looking ahead to tomorrow’s speech from the Reserve Bank of Australia’s (RBA) Assistant Governor Guy Debelle.

Any dovish or cautious comments about the outlook for Australia’s economy would be AUD-negative.

Pound (GBP) traders will be looking ahead to tomorrow’s interest rate decision from the Bank of England (BoE).

While the bank is largely expected to hold its interest rate at 0.1%, it is likely to be more upbeat about the outlook for the UK economy.

As a result, we could see the Pound Australian Dollar exchange rate head higher this week.

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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts