The Pound-Australian Dollar rate could extend gains if risk appetite deteriorates further, while quiet UK data may leave Sterling reliant on broader market sentiment.
The Pound Australian Dollar (GBP/AUD) exchange rate gained ground on Thursday as a risk-off mood swept markets.
At the time of writing, GBP/AUD was trading at AU$1.9426, up around 0.2% on the day.
Pound to Dollar (GBP/USD): 1.323331 (-0.32%)
Australian Dollar to Dollar (AUD/USD): 0.680803 (-0.51%)
DAILY RECAP:
The risk-sensitive Australian Dollar (AUD) weakened on Thursday as a souring market mood dampened demand for the currency.
The deterioration in sentiment was partly due to a sell-off in technology stocks, as the scandal surrounding chipmaker Nvidia unnerved investors. The controversy initially centred on CEO Jensen Huang’s alleged affair with a Chinese businesswoman suspected by US intelligence of spying for Beijing.
However, the situation escalated on Wednesday night following reports of a second alleged affair, this time with an Nvidia executive, prompting reports that the company’s board was preparing to remove Huang as CEO.
Additionally, fading optimism around US-Iran peace negotiations may have added to the cautious mood and put further pressure on AUD.
Meanwhile, the Pound (GBP) was subdued on Thursday, as the UK’s latest GDP figures failed to prompt a decisive upside in Sterling.
Although the data showed British economic growth accelerating from 0.5% in the second quarter to 0.7% in the third, this was in line with market expectations.
As a result, GBP was largely unmoved by the figures.
Near-Term GBP/AUD Forecast: Risk Appetite in Focus
Looking ahead, both UK and Australian economic data is thin on the ground on Friday, potentially leaving the GBP/AUD exchange rate to trade on market risk dynamics.
Investors will be keeping a close eye on events in the Middle East. Any fresh developments could see risk appetite shift. Signs of diplomatic efforts could cheer investors while threats of escalation could sour the mood.
News around Nvidia could also affect market sentiment. If technology stocks continue to retreat, the riskier Australian Dollar may struggle.
Our currency coverage draws on live market data, official economic releases and published bank research.
