The GBP/AUD exchange rate stumbled yesterday after the pairing came under renewed pressure according to rating agency Moody’s. Both currencies have felt the pressure in recent weeks. GBP has come under scrutiny after recent dovish remarks from the Bank of England (BoE) saw the Pound sink. The UK also has upcoming economic data which may pile on the pressure as analysts warn that UK GDP could slow even further. Meanwhile, AUD has suffered after an underwhelming response to the global trade outlook. The market had hoped for a rebound after the signing of the Phase one deal between the US and China but that hasn’t been the case, leaving the currency vulnerable.
GBP Exchange Rates Could Be Under Threat From Upcoming Economic Data Releases
Analysts at Moody’s warned that the UK’s GDP figure could slow to around 1% for the year. As a result, the GBP’s confidence in its outlook faded and left the currency on the back foot against its rivals once more. Recent developments saw the BoE make dovish statement hinting towards an interest rate cut. Some were optimistic in hoping that the GBP could be resilient and further data releases would show signs of a rebound. But with more disappointing data predicted for the UK, GBP is likely to fall which may force the BoE’s hand in making a rate cut at month-end.
Pound to Australian Dollar Rate Vulnerable to Threats From Weak UK Wage Growth and Brexit Clarity
The GBP/AUD rate could face further pressure later today as the latest average weekly earnings figures are released. Predictions point towards a slight easing in the figures which would put additional pressure on the BoE and will likely increase bets of a cut should the figures disappoint. GBP also remains under pressure from a lack of clarity in the Brexit saga. Politics took a backseat in recent weeks as the attention turned to the BoE, but the issue is still very much real. The UK and the EU are still a long way from reaching a deal and until progress is made, it will likely weigh heavy on GBP.
Support for the Aussie Dollar may be lacking in the upcoming days as concerns over the global trade outlook continue to linger. Investors were positive that the signing of the Phase One deal would boost the currency and support it. However, after striking the deal, the market did not respond in the manner that was expected, instead remaining assertively cautious to the possible difficulties that may lie ahead in the two countries reaching a Phase Two deal agreement. This has left the AUD trading flat and unless the currency shows any signs of resilience in the coming week, AUD rates are set to drop off.
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