The GBPAUD exchange rate has economic data ahead on Thursday with trade figures and UK central bank action.
GBPAUD – Daily Chart
The GBP v AUD is testing the resistance level at 1.9975 and a failure here could take the pair back to 1.86. Any GBP strength could create a breakout situation.
Data starts on Thursday at 8:30am HKT with Australian trade balance figures and analysts expecting a $7 billion figure, down from $7.079 billion.
The UK data comes later at 8pm HKT with the Bank of England interest rate meeting. The actions by the BoE may be predicted but any change could lead to a new trend developing over the next week or two. Regardless of the bank’s decision, the press conference could change the ideas of investors.
We have to factor in the recent stresses over the UK’s budget and finances.
Will the BoE announce a larger-than-expected rate cut to help the government?
Britain is struggling from a lack of growth and employment. The recent tax threat only adds to the problem and many key bills, such as energy, water, and council tax are all set to rise sharply in the coming months.
Lower borrowing costs can help the government and support growth and employment, partially offsetting the reaction to the budget. Financial markets and economists are currently pricing in three interest rate cuts by the Bank of England this year.
The Australian economy may be at risk from China tariffs from the Trump administration.
Australia’s Judo Bank PMI data rose to 51.1 in January from 50.2 in December, highlighting modest growth in private sector activity. The Judo Bank Services PMI rose to 51.2 from 50.8, marking the twelfth consecutive month of expansion in the services sector.
The Aussie dollar may depreciate further with the increased likelihood that the Reserve Bank of Australia could make another rate cut in February. The RBA has maintained the Official Cash Rate (OCR) at 4.35% since November 2023, with policymakers suggesting that inflation must “sustainably” return to its 2%-3% target range before any policy change.
The GBP v AUD is hitting resistance and a correction is possible.
