March 31, 2021 – Written by John Cameron
GBP/AUD Exchange Rate Heads Higher on Encouraging UK Economic Data
The Pound Australian Dollar exchange rate rose by 0.2% today following the release of the UK’s GDP data for the fourth quarter of last year, which beat forecasts and was revised up to 1.3%. The pairing is currently trading around AU$ 1.81.
Rupert Thompson, chief investment officer at wealth management firm Kingswood, said of the data:
‘This follows the recent stronger than expected numbers for business confidence which suggests the contraction in the first quarter will be smaller than first feared.’
‘Meanwhile, the fast vaccine rollout has bolstered hopes of a rapid rebound over coming months.’
As a result, UK markets are more confident about the outlook for the nation’s economy, with easing lockdown measures expected to further contribute to a recovery of economic growth in the months ahead.
Nela Richardson, chief economist at ADP, commented on the report:
‘Job growth in the service sector significantly outpaced its recent monthly average, led with notable increase by the leisure and hospitality industry.
‘This sector has the most opportunity to improve as the economy continues to gradually reopen and the vaccine is made more widely available. We are continuing to keep a close watch on the hardest hit sectors but the groundwork is being laid for a further boost in the monthly pace of hiring in the months ahead.’
Australian Dollar (AUD) Struggles Despite Strong Chinese PMI Data
The Australian Dollar (AUD) failed to rise against the Pound today despite strong Chinese PMI data buoying confidence in the Australian economy.
China is Australia’s largest trading partner, so any improvement in the second-largest economy tends to prove AUD-positive.
However, Australia’s own Covid-19 crisis is dampening market confidence in the risk-sensitive ‘Aussie’.
Added to this, growing strength in the US Dollar has weakened demand for the Australian Dollar.
In Australian economic news, today saw the release of the latest Building Permits figure for February, which beat forecasts and rose by 21.6%.
Analysts at Business Standard commented:
‘Australia Building Permits Rebound 21.6% On Month In February. Australia’s total number of building permits was up a seasonally adjusted 21.6% on month in February, coming in at 19,422, the Australian Bureau of Statistics said on Wednesday, following the 19.4% slide in January. Private sector houses rose 15.1% to 13,939, while private sector dwellings excluding houses increased 45.3%.’
Pound Australian Dollar (GBP/AUD) Exchange Rate Forecast: Could a Strong UK Manufacturing PMI Boost the Pound?
Australian Dollar (AUD) investors will be awaiting tomorrow’s release of the latest Retail Sales figure for February.
Any improvement in the outlook for Australia’s economy would be AUD-positive.
Tomorrow will also see the latest Australian Trade Balance figure for February.
Any signs of increasing exports would boost the Australian Dollar Pound exchange rate.
Pound (GBP) traders are awaiting tomorrow’s release of the latest UK Manufacturing PMI for March.
Any improvement in the UK’s Manufacturing sector would boost the Pound Australian Dollar exchange rate.
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TAGS: Australian Dollar Forecasts Pound Australian Dollar Forecasts