The Pound-Australian Dollar could remain sensitive to risk appetite, with geopolitical tensions potentially weighing on the Aussie and supporting GBP/AUD.
The Pound Australian Dollar (GBP/AUD) exchange rate touched a near six-week high on Wednesday night before retreating through Thursday as profit-taking set in and positive Australian data supported the ‘Aussie’.
At the time of writing, GBP/AUD was trading at around AU$1.9039, down 0.3% on the day.
Pound to Dollar (GBP/USD): 1.324686 (-0.13%)
Australian Dollar to Dollar (AUD/USD): 0.695463 (+0.14%)
DAILY RECAP:
The Australian Dollar (AUD) initially touched a near six-week low against Sterling during Thursday’s Asian trading session, before regaining ground thanks to upbeat trade data.
Australian trade rebounded in August, with exports up 3.7% and imports up 5.8% month on month, following contractions in both in July. As international trade is a key part of Australia’s economy, the positive trade figures underpinned the ‘Aussie’.
AUD also drew some support from Australia’s final manufacturing PMI for September, which was revised up from 49.3 to 49.6.
Furthermore, rising commodity prices – particularly iron and coal – also supported the resource-linked Australian Dollar.
These multiple factors helped the ‘Aussie’ regain ground despite a risk-off market mood.
Meanwhile, the Pound (GBP) lacked a clear direction on Thursday as market-moving British data was thin on the ground.
The only release was the UK’s final manufacturing PMI for September, which was revised marginally lower. The survey score came in at 51.9, up from August’s 51.7 but slightly below the preliminary result of 52.
This lacklustre reading had little impact on Sterling either way, leaving GBP to trade on wider market trends and move without a clear trajectory overall.
As a result, the Pound was unable to hold at the near six-week high struck against AUD during Thursday’s Asian trading session, with the UK currency suffering some profit-taking.
Near-Term GBP/AUD Forecast: Risk Appetite in Focus
Looking ahead, economic releases from both Australia and the UK are thin on the ground on Friday, likely leaving the GBP/AUD exchange rate to trade on wider market trends.
Risk sentiment could be the key driver of movement, with markets keeping a close eye on the conflicts in the Middle East and Ukraine.
Simmering geopolitical tensions and rising oil prices could sour the market mood, which would likely weigh on the risk-sensitive ‘Aussie’ and support GBP/AUD.
Our currency coverage draws on live market data, official economic releases and published bank research.
