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GBP/AUD Exchange Rate Slumps on Weak UK PMI Data

Last week’s high: AU$1.8471

Last week’s low: AU$1.81879

UK’s Sluggish Start to Q2 Leaves Pound on the Back Foot

The Pound Australian Dollar exchange rate slumped to a fresh one-month low last week as markets reacted to the softer-than-expected growth in the UK private sector last month.

Markets were particularly concerned by the lacklustre activity in the UK’s manufacturing and services sector, with analysts warning that April’s underwhelming data points to the UK economy only expanding 0.2% in the second quarter.

Meanwhile, after getting off to a slow start last week as the Reserve Bank of Australia (RBA) voted to leave interest rates on hold, the Australian Dollar shot higher as it was buoyed by some stronger-than-expected trade figures.

AUD Outlook: Will BoE Delay its Next Rate Hike to 2019?

Looking ahead the GBP/AUD exchange rate looks set for more losses this week as the Bank of England (BoE) delivers its next rate decision.

A run of soft UK data has effectively erased any hopes of the BoE raising interest rates this week, with analysts suggesting policymakers may now be unwilling to commit to any tightening in 2018 following the abysmal start to the year.

In the meantime the Australian Dollar may tick higher this week if Australia’s latest consumer confidence index prints as high as expected.

Key Events

9th May

01:30 AU Consumer Confidence (May)

10th May

09:30 UK Trade Balance (Mar)

12:00 UK BoE Rate Decision

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To keep up to date with the Australian Dollar, visit the AUD blog in our Currency News section.

James Baxter

Senior Currency Broker
T: 01442 892 062

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