Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Softens on Risk Aversion

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Pound Sterling (GBP)

The Australian Dollar to Pound Sterling (AUD/GBP) exchange rate softened by around 0.13% on Friday afternoon.

This can be attributed to dampened market sentiment amid anxieties regarding Russia’s financial status. The Pound, meanwhile, has generally softened against the majority of its most traded rivals after consumer confidence declined.

The Australian Dollar to Pound Sterling exchange rate is currently trending in the region of 0.5204.

Australian Dollar Exchange Rate Softens on Risk Aversion

After it became apparent that Russia could struggle to cope with the cost of the current conflict with Ukraine, trader risk sentiment dampened considerably. As a risk-correlated currency, the Australian Dollar’s high-yielding potential is the opposite of what traders seek amid geopolitical anxieties.

Compounding the ‘Aussie’ declination are general issues in the commodities market, with specific reference to oil prices. ‘Investors are grappling with how to interpret these significant falls in commodity prices,’ Macquarie analysts say. ‘The recent widespread falls in equity market indexes suggest investors see the fall in commodity prices only as a major negative. While we agree that global growth is weak and no doubt global growth expectations have been negative in the last few months, it is also important to reflect the benefits that these commodity price falls should ultimately bring.’

The Australian Dollar to Pound Sterling exchange rate has dropped to a low today of 0.5196.

Pound Sterling Exchange Rate Ticks Lower on Consumer Confidence

The Pound struggled against its major peers on Friday after consumer confidence printed disappointingly. GfK Consumer Confidence was forecast to increase from -2 to -1, but the actual result declined to -4. ‘After seven months of flatlining within two points either side of -1, the index has finally moved just out of this range, and the bad news for the government is that it has moved downward,’ said Nick Moon, managing director of social research at GfK.

Other British data has had little impact on Sterling movement under the weight of the consumer confidence print. However, Central Government NCR increased from -3.9 billion to 7.2 billion, Public Finances advanced from -2.8 billion to 6.7 billion, Public Sector Net Borrowing increased from 6.4 billion to 13.4 billion and CBI Reported Sales jumped from 27 to 61.

Australian Dollar to Pound Sterling (AUD/GBP) Exchange Rate Forecast to Hold Steady

With an absence of domestic data to curb the trend, the Pound to Australian Dollar exchange rate is likely to trend within a narrow range over the weekend. Quiet trading over the Christmas period should see dampened market volatility.

The Australian Dollar to Pound Sterling exchange rate has reached a high today of 0.5234.

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