Pound Australian Dollar Update, News: GBP/AUD Rate Trends Sideways

Pound Australian Dollar (GBP / AUD) Exchange Rate Rangebound amid Risk-On Trading

The Pound Australian Dollar (GBP / AUD) exchange rate is trading narrowly today. A risk-on trading mood is benefitting both currencies today. The Pound (GBP) may be further bolstered amid reports of further financial stimulus for the UK. The Australian Dollar (AUD) meanwhile is seeing its potential gains limited after dovish comments by Reserve Bank of Australia (RBA) Governor Philip Lowe.

At time of writing the GBP / AUD exchange rate is at around $ 1.7802, virtually unchanged from this morning’s figures.

Pound (GBP) Exchange Rates Bolstered by Hopes for Support from Sunak

The Pound (GBP) is climbing against many of its rivals today. A return in risk appetite has helped boost Sterling amid more positive reports from the war in Ukraine. GBP may also be seeing support from expectations that Chancellor Rishi Sunak is set to deliver support to UK households on Wednesday.

Multiple evacuations of Ukrainian civilians from the city of Mariupol have likely helped boost risk-on trading today. A train carrying 780 survivors of the Russian’s bombardment of the city is expected to arrive in Lviv today.

Additionally, confidence in the Pound could be bolstered amid expectations that Chancellor Rishi Sunak is set to unveil support measures for UK households on Wednesday. Figures earlier today indicated that borrowing for the past financial year was below forecasts. Analysts feel that this may strengthen Sunak’s position and allow him to offer measures such as tax cuts or additional spending.

Gains for GBP could be limited today however amid figures indicating that a record number of UK manufacturers are set to raise prices. The figures, collected by the Confederation of British Industry (CBI), showed that 82% of firms are expecting to raise prices in the coming months. The CBI has called on Sunak to help ease inflationary pressures for UK businesses.

Australian Dollar (AUD) Exchange Rates Gain despite Dovish Outlook from RBA

bannerThe Australian Dollar (AUD) is climbing against many of its rivals today amid a risk-on market mood. Indications that further negotiations between Russia and Ukraine may be forthcoming may be helping to boost AUD. Gains may limited however following dovish comments from RBA Governor Philip Lowe.

Ukraine has signalled this week that it is still prepared to engage in diplomatic talks. This could be in turn helping to boost the ‘Aussie. Speaking on Monday, Ukraine’s President Volodymyr Zelenskiy said that a meeting with his Russian counterpart, Vladimir Putin, was absolutely necessary in order to bring an end to the conflict.

An ongoing dovish outlook from RBA Governor Philip Lowe may limit significant gains for the Australian Dollar however. Speaking on Tuesday, Lowe reiterated his stance that persistently high inflation was ‘quite unlikely’ and that he was prepared to keep interest rates at their currently low levels.

Lowe acknowledged that he had held off on rate rises in order to prompt further economic growth:

‘There’s a huge benefit to the country having people in jobs and having opportunities. While we can, we will keep interest rates very stimulatory to keep people in jobs. How long we can do that for I’m not sure. ‘

GBP / AUD Exchange Rate Forecast: Will UK Inflation Prompt Rate Hike Bets?

Looking to the week ahead for Sterling, a forecast rise to the UK’s rate of inflation on Wednesday could push the currency higher. The figures may prompt additional bets on GBP investors if they print as forecast, with markets likely to see the data as further cause for further rate hikes from the Bank of England (BoE).

UK growth for March is expected to fall across all private sectors on Thursday if figures print as forecast. This could limit further gains for Sterling.

For the Australian Dollar, a forecast rise in private sector growth on Wednesday could support Lowe’s stance boost the currency. The ‘Aussie’ is also likely to climb should iron ore prices rise.

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