The Pound Australian Dollar (GBP AUD) exchange rate clung on early gains it made at the start of the European session yesterday as UK released its latest GDP estimate.
Pound (GBP) Stable as GDP In Line with Expectations
Pound held on to the gains made following a sudden drop in the Australian Dollar late on Thursday as the UK latest GDP figures confirmed that the UK economy grew slightly faster in the second quarter.
According to data published by the Office for National Statistics (ONS) the UK economy grew from 0.2% to 0.3% between April and June, putting it in line with market expectations and alleviating fears that the recent revision of June’s retail sales down from 0.6% to 0.3% may have hampered UK growth in the second quarter.
However many analysts remain concerned that UK economic growth remains fairly subdued this year, with some suggesting that GDP may see limit growth over the next couple of quarters.
Chief UK economist at Pantheon Macroeconomics, Samuel Tombs said;
‘Looking ahead, we expect the economy to continue to struggle, with GDP rising by just 0.2% in both Q3 and Q4. Recent surveys of export orders have picked up, but exporters are too reliant on imports for net trade to fully offset a further slowdown in consumers’ spending.’
Australian Dollar (AUD) Pressured by a Lull in Risk Appetite
Meanwhile the Australian Dollar presented Sterling with its initial gains at the start of the European session yesterday as the ‘Aussie’ came under pressure following a drop in risk sentiment ahead of the central bank summit in Jackson Hole on Friday.
Markets have paused ahead of the symposium as they await speeches by prominent central bankers, with the speech by Federal Reserve Chair Janet Yellen being of particular focus as investors hope that she will discuss the bank’s plans to reduce its balance sheets and whether the Fed is still looking to raise interest rates again this year.
GBP AUD Forecast: Lull in Economic Data to Leave Currencies Open to External Influences?
Looking ahead the GBP AUD exchange rate is likely to be a little directionless over the next few session as a lull in economic data from both countries leaves the pairing exposed to outside factors, with any movement between the Pound and Australian Dollar likely to be driven by Brexit sentiment or commodity prices.
Current Exchange Rates
At the time of writing the GBP AUD exchange rate was trending around 1.6252 and the AUD GBP exchange rate was trending around 0.6151.