Pound To Australian Dollar Price News, Forecast: Dovish RBA Minutes Hit Aussie

The Pound to Australian Dollar (GBP/AUD) exchange rate rallied on Tuesday as dovish signals from the Reserve Bank of Australia (RBA) weighed on the ‘Aussie’, despite weaker-than-expected UK labour market data limiting Sterling’s broader upside.

At the time of writing, GBP/AUD was trading around AU$1.8806, up roughly 0.3% on the session.

DAILY RECAP:

The Australian Dollar (AUD) came under pressure during Tuesday’s Asian session following the release of the Reserve Bank of Australia’s latest policy meeting minutes.

Investors interpreted the minutes as less hawkish than expected, with policymakers appearing increasingly cautious about the impact previous interest rate rises are having on the domestic economy.

While the RBA acknowledged inflation remains elevated and that upside price risks persist, officials also highlighted mounting concerns over slowing household consumption and the broader drag from higher borrowing costs.

The minutes suggested policymakers are becoming more comfortable with adopting a measured approach to future tightening, prompting traders to scale back expectations for additional rate hikes later this year.

This reassessment weighed heavily on the Australian Dollar and allowed GBP/AUD to push higher through Tuesday’s trade.

Meanwhile, the Pound (GBP) struggled to build broader momentum following the release of the UK’s latest labour market figures.

Data from the Office for National Statistics showed UK unemployment unexpectedly ticked up from 4.9% to 5% in March, while wage growth slowed from 3.6% to 3.4%.

The softer employment figures reinforced expectations that the Bank of England (BoE) may proceed more cautiously with any future policy tightening.

Markets subsequently pared back some expectations for a near-term BoE interest rate rise, limiting Sterling’s upside against most major peers.

However, the Pound still managed to outperform the softer Australian Dollar as AUD sentiment deteriorated following the RBA minutes.

GBP/AUD Forecast: UK Inflation Data and Risk Sentiment in Focus

Looking ahead, Wednesday’s UK consumer price index will likely act as the next major catalyst for Sterling movement.

Economists expect UK inflation to cool slightly in April despite ongoing pressure from elevated global energy prices linked to disruption in the Strait of Hormuz.

A softer inflation reading could further dampen expectations for a near-term Bank of England rate hike and potentially weigh on the Pound.

For the Australian Dollar, the absence of major domestic economic releases may leave the currency sensitive to wider market sentiment.

Any deterioration in global risk appetite could pressure the risk-sensitive ‘Aussie’, while improving sentiment may help AUD stabilise after Tuesday’s losses.