GBP/AUD is trading in a short-term sideways trend in early trading on Tuesday, waiting for strong catalysts like the UK GDP growth report due later today.
The pair is currently trading at 1.9267, up 0.02% as of 5:12 AM UTC. On the hourly chart, GBP/AUD is still bullish.
The markets are waiting for a series of UK data, such as the economic growth for the third quarter, manufacturing production, and trade balance.
Investors are also watching closely any developments related to the UK national election due on Thursday. A series of polls published in the weekend showed that Prime Minister Boris Johnson’s Conservative Party had extended its lead in the last few days.
Yesterday, the Australian Bureau of Statistics (ABS) released house prices data, which beat analysts’ expectations by a margin. In the three months to September, house prices surged 2.4% across capital cities, with Sydney and Melbourne recording a 3.6% increase. Economists expected a modest growth of only 0.6%. The housing market is benefiting from the central bank’s recent interest rate cuts.
While the Aussie found support in house prices, the currency has been dragged down by recent business confidence data. The National Australia Bank (NAB) said that its index of business conditions was unchanged at +4 while the confidence index declined 2 points to zero. NAB’s survey involved 500 Australian companies.
NAB economist Alan Oster explained:
“Overall, the business survey is consistent with ongoing weakness in GDP growth – especially private demand – and suggests there has been little improvement in Q4 for GDP. With conditions below average and confidence also weak, there is a risk that employment growth slows and that investment will remain weak despite spill over demand from public sector spending and a stabilisation in mining.”
However, the Aussie almost ignored local data to assess China’s inflation updates. China is by far the largest trade partner of Australia, so any significant economic updates released by China has an impact on the AUD.
Earlier today, China’s official data showed that producer prices (PPI) fell last month by 1.4% year-on-year, driven by weakening demand and declining exports.
On the other side, the consumer price index (CPI) surged 4.5% in November year-on-year, which is the largest acceleration in eight years.