Pound Sterling Australian Dollar (GBP/AUD) Exchange Rate Falls as Risk Appetite Rises
The Pound Sterling Australian Dollar (GBP/AUD) exchange rate slipped, leaving the pairing trading at around AU$ 1.9268.
The ‘Aussie’ was boosted today after data revealed that Australian business confidence rose, lifting it from the lowest level since mid-2013.
Meanwhile, an increase in risk appetite also boosted the risk-sensitive Australian Dollar.
Despite the death toll from the spread of Covid-19 (Wuhan coronavirus) jumped by 108 to 1,016, the number of new and confirmed cases fell.
However, the ‘Aussie’ was unable to rally against Sterling as reports revealed that China’s President, Xi Jinping warned officials that efforts to contain the Wuhan virus had gone too far.
According to Reuters, an anonymous source said the president made these warnings last week.
Added to this, concerns about the global economic impact of the virus weighed on markets.
Pound (GBP) Slides as GDP Stagnates in Q4 2019
The Pound slumped against the ‘Aussie’ today after data revealed growth stagnated in the final three months of 2019.
However, flash GDP revealed the economy grew by a better-than-expected annual rate of 1.1%, allowing GBP to make some gains.
Commenting on this morning’s data, Karim Yousfi, chief global strategist at Audacity Capital said:
‘Few expected fireworks from a report that focuses on the final months of election and Brexit uncertainty. So this is more a case of not good, but good enough. With a clear majority of the Bank of England’s interest rate-setting grandees already reluctant to cut rates, this GDP print will give them no impetus to cut any time soon. For this reason, the Pound is pepping up against both the Dollar and the Euro.’
However, Sterling remained under pressure as tensions between the UK and European Union remained in focus.
Pound Australian Dollar Outlook: Aussie Consumer Confidence in Focus
Looking ahead to this evening, the Australian Dollar (AUD) could rise against the Pound (GBP) following the release of consumer confidence data.
If Westpac reveals February’s consumer confidence rises higher than expected, the ‘Aussie’ will rise.
Meanwhile, due to a lack of economic data releases, the main catalyst for movement of Sterling is going to be UK-EU trade relations.
If tensions between the UK and EU increase, and markets price in a lower chance of the two securing a deal, the Pound Australian Dollar (GBP/AUD) exchange rate will slide.
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TAGS: Pound Australian Dollar Forecasts